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Africa adopts international practice on interconnect rates

The decision by Zambia and Uganda to regulate interconnection fees shows that Africa is adopting an international practice of fixed rates in order to protect consumers from exploitation by mobile service providers.

Since the coming of mobile communication in Africa over 15 years ago, mobile service providers have been left to decide their own interconnection rates, but this is changing as many African governments are now taking steps to regulate the fees.

Both the Zambian and Ugandan governments announced last week that they have embraced interconnection rates to protect consumers from high prices charged by mobile service providers.

Zambia Information and Communications Technology Authority (ZICTA) Acting Director Richard Mwanza said at a press briefing in Lusaka that the authority will within six months start regulating interconnection rates, now that it has the power to do so.

ZICTA now has powers to severely punish service providers whose interconnection rates have not been approved by the authority.

“Among other important functions, the law provides mandates for ZICTA to promote competition and development in the telecom sector,” Mwanza said.

Interconnection refers to the commercial arrangements under which service providers connect their equipment, networks and services to each other in order to allow their customers to access the networks of other service providers. When the new termination fees are finally implemented, African communications experts and consumers expect a drop in the call costs for end users.

Generally, subscribers in Africa face a lack of consistency in pricing as the interconnection rates are determined by service providers, all of which charge different rates. The argument now by African governments is that unregulated fees stifle competition, kill innovation , hold back penetration and prevent additional investment in the sector — and users get cheated as a result.

The move towards lower rates in many African countries has been gaining speed. The move by African governments to regulate interconnection rates also follows uncompetitive restrictions by incumbent operators who have been overcharging private operators using their networks.

“Communication should not be only for the rich to enjoy but also for the poor. The move by ZICTA will greatly benefit both the rich and the poor,” said Mwape Mwale, a Zambian consumer.

Meanwhile, Uganda Communications Commission (UCC) Executive Director Patrick Masambu has told all mobile service providers in the country that effective Jan. 1 the commission will step in to regulate interconnection rates. Masambu said sound interconnection conditions and pricing are a prerequisite for healthy competitive market.

South Africa, Southern Africa's largest telecom market, was the first to regulate interconnection rates two months ago after the Independent Communications Authority of South Africa (ICASA), which has oversight over the process, issued regulations on the interconnections.

As in South Africa, Uganda's move to regulate interconnection charges has been informed by a study that was undertaken by PriceHouseWaterCoopers London on behalf of UCC. Zambia, Uganda and South Africa follow in the steps of Nigeria, Kenya, Zimbabwe, Tanzania and Botswana in setting interconnection tariffs.

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