The Tanzania Communications Regulatory Authority (TCRA) is set to go ahead with a cut in interconnection rates and have outlined the rates for the next four years.
HumanIPO reported last month the TCRA was discussing plans to cut interconnection rates to TSZ 34.92 (US$0.02) from the original TSZ 112 (US$0.06) based on findings of a cost survey conducted by PriceWaterhouseCoopers (PwC).
The interconnection price cuts will officially be implemented from March 1 this year.
The TCRA has future plans to further reduce interconnection costs. The next price cut is scheduled for January 1 in 2014 and by January 2017, the interconnection rates in the country will be at TSZ 26.96 (which remains US$0.02).
Three of Tanzania’s mobile operators, Airtel, MIC and Vodacom, have rejected the findings by PwC and proposed varying interconnection rates.
The mobile operators have argued a severe decrease will negatively impact their efforts and capacity to invest in rural areas.
The TCRA accepts the fact mobile operators will experience less revenue from interconnection as net receivers though the net receivers will also experience lower costs by paying less interconnection charges by other mobile operators.
The TCRA said in a statement: “It is the considered view of the Authority that traffic patterns will change through increase of subscribers and air time.”
All of the country’s mobile operators are expected to enter into new interconnection agreements then submit the agreements by March 31.
