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Mobile Termination Rates Dropping; UCC

The Uganda communications commission dropped the termination mobile rates through at regulating rates and charges for communications services to protect consumers from excessive tariffs.

Godfrey Mutabazi the UCC boss said that the Commission has over the years regulated interconnection and access systems between operators and users of telecommunication services aimed at regulating rates and charges for communications services to protect consumers from excessive tariffs.

Eng Mutabazi adds that Uganda has consistently enjoyed improvements in interconnection rates evidenced by the fact that the telecommunication sector is one of the few sectors with consistent price drops over the last ten years despite increases in the cost of factor inputs like fuel and forex depreciation. He defined Interconnection as the set of commercial and technical frameworks to enable customers of one telecommunications network to ‘’call’’ or ‘’communicate’’ with customers of another network.

Mutabazi added that the market has already welcomed Airtel Uganda’s move to reduce calling rates to UGX 3/= per second which is partly attributed to the fact that since 1st July 2019, the interconnect rate was dropped from UGX 65/= to UGX 55/= as a regulatory intervention an indication that shs 10 reduction in interconnect pricing may result into a 25% reduction in the cost of interconnection.

The Interconnection regime in Uganda has come along way with Key Regulatory Milestones  in  2005 the Interconnection Regulations in place required timely interconnection of new entrants, and therefore Pre 2010 Interconnection rates were set mainly by market incumbents (MTN, UTL, Airtel). At the time the market average interconnection rate was UGX 181/=

Following a detailed costing of network services by the Commission, the determination and issuance of a maximum interconnection rate were made in March 2018. And a  Due consideration was made for network quality of service, traffic and subscription growth projections, network equipment wears & tear as well as a fair return on capital employed in the industry.

As a result the Commission issued a Maximum Interconnection rate of UGX 65/= for 2018, to be followed by further dropping to UGX 55/= that took effect on 1st July 2018 and expected to drop even further to UGX 45/= in 2020

Mutabazi adds that the Commission once again welcomes and applauds the move by Airtel Uganda who has responded to the need to drive affordability of communication across networks.

The Commission believes that the new Interconnect rates and the prudent response from Mobile Network Operators to drive affordability of communications should take us a long way in promoting industry competition and its associated benefits of improved service affordability, variety, and innovation.

 

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