BabuK
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- Jul 30, 2008
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Study recommends reduction from 112/- to 34/92
Major Telecommunication operators in the country have refused to adopt the new proposed interconnection rate, which would have meant slicing off nearly 77/- per second at a go.
Under the proposed rates, the firms would charge approximately 34/92 per second and that is close to three times less than the price they are charging now which is 112/- per second. The lower rates were proposed by the PricewaterhouseCoopers (PwC) but the operators are not having it, instead they are calling for a gradual reduction.
They have argued that the proposed reduction is too big to adopt at a go, fearing that it may potentially affect communication investments.
The operators who convened yesterday in Dar es Salaam along with other stakeholders to debate the proposed lower interconnection rates, concurred that the government, in their words, should not rush into adopting the change, but should take account of the sector's investments.
They argued further that, they are not against the government motive, but that a 69 percent drop is just too steep to bear and may very well be disastrous to the sector as investment shares may also drop rapidly from investors withdrawing their stocks to reinvest elsewhere.
They proposed that the rates be reviewed to meet consumer as well as operator interests. The telecom companies that have opposed the proposed rates are Vodacom Tanzania Limited, Millicom International Cellular (MIC) Tanzania Limited (Tigo-Tanzania) and Airtel Tanzania Limited.
Tigo Tanzania Legal Officer, Revocatus Mkata said his company expects to implement a number of investments in the next five years and such sudden changes by the regulator will hamper execution of their programme and/or potentially freeze it all together.
Tigo, through their legal officer offered a rate reduction plan of 25 per cent annually that they believe to be favourable to all parties concerned.
The proposal was backed by one of Tigo's competitors, Airtel whose Legal Officer Clara Mramba observed that the proposal was a ‘viable' option given the company's long term investment plans.
"…we already have investment plans set and even allocated budget amounts…" she echoed the Tigo representative's argument adding: "…such changes can affect the company's performance…"
Walarick Nittu, Legal Officer from Vodacom Tanzania also backed the gradual reduction proposal, warning that an abrupt reduction of rates will affect the companies viability but warned that the negative effects will not be felt by the companies alone but the general public, especially in remote areas.
However several other telecom service providers agreed to the rate changes without much fuss. Tanzania Telecommunication Co. Limited, Zanzibar Telecommunication Limited, Dovetel Tanzania Limited, Benson Online Limited and Six Telecom Limited are some of the companies that concurred to the proposed changes.
TTCL Acting Chief Executive Officer had the following comment that gives fresh breathe to the argument highlighting otherwise unknown details of the trade.
"We're charged 500m/- in monthly fees to compensate the interconnection charges to other telecom operators…we need the rates be reduced even more…"
In fact, he argued that the lower rate will improve the sector by promoting competition which in turn will ensure only the top most services are offered at reasonable and affordable rates that earn the service providers due profits but also do not hurt the consumers' pockets.
The entire saga was brought on when, in a move to reduce the financial burden on mobile service users that change from one network to another, Tanzania Communication Regulatory Authority (TCRA) awarded the United Kingdom based consultancy firm –PwC to investigate the current price rates and it is that inquiry that led to the proposed lower rates that are now been debated.
TCRA Zonal Operations Deputy Director, Victor Nkya said the companies have no more than self interest in their agenda to keep the rates high. The changes were developed as the direct result of a comprehensive study aimed at promoting the communication sector and not destroying it as purported by the reluctant companies.
Nkya told the stakeholders in attendance that a team of officers from TCRA will prepare a report based on the discussion and the stakeholder suggestions will be submitted to the Tanzania Communication Board on January 28 of this year.
"The board will go through the recommendations…" he asserted and made clear "…the proposed rates will come into effect on the 1st of March and then continue to go down annually until December 31, 2017…"
SOURCE: THE GUARDIAN
Major Telecommunication operators in the country have refused to adopt the new proposed interconnection rate, which would have meant slicing off nearly 77/- per second at a go.
Under the proposed rates, the firms would charge approximately 34/92 per second and that is close to three times less than the price they are charging now which is 112/- per second. The lower rates were proposed by the PricewaterhouseCoopers (PwC) but the operators are not having it, instead they are calling for a gradual reduction.
They have argued that the proposed reduction is too big to adopt at a go, fearing that it may potentially affect communication investments.
The operators who convened yesterday in Dar es Salaam along with other stakeholders to debate the proposed lower interconnection rates, concurred that the government, in their words, should not rush into adopting the change, but should take account of the sector's investments.
They argued further that, they are not against the government motive, but that a 69 percent drop is just too steep to bear and may very well be disastrous to the sector as investment shares may also drop rapidly from investors withdrawing their stocks to reinvest elsewhere.
They proposed that the rates be reviewed to meet consumer as well as operator interests. The telecom companies that have opposed the proposed rates are Vodacom Tanzania Limited, Millicom International Cellular (MIC) Tanzania Limited (Tigo-Tanzania) and Airtel Tanzania Limited.
Tigo Tanzania Legal Officer, Revocatus Mkata said his company expects to implement a number of investments in the next five years and such sudden changes by the regulator will hamper execution of their programme and/or potentially freeze it all together.
Tigo, through their legal officer offered a rate reduction plan of 25 per cent annually that they believe to be favourable to all parties concerned.
The proposal was backed by one of Tigo's competitors, Airtel whose Legal Officer Clara Mramba observed that the proposal was a ‘viable' option given the company's long term investment plans.
"…we already have investment plans set and even allocated budget amounts…" she echoed the Tigo representative's argument adding: "…such changes can affect the company's performance…"
Walarick Nittu, Legal Officer from Vodacom Tanzania also backed the gradual reduction proposal, warning that an abrupt reduction of rates will affect the companies viability but warned that the negative effects will not be felt by the companies alone but the general public, especially in remote areas.
However several other telecom service providers agreed to the rate changes without much fuss. Tanzania Telecommunication Co. Limited, Zanzibar Telecommunication Limited, Dovetel Tanzania Limited, Benson Online Limited and Six Telecom Limited are some of the companies that concurred to the proposed changes.
TTCL Acting Chief Executive Officer had the following comment that gives fresh breathe to the argument highlighting otherwise unknown details of the trade.
"We're charged 500m/- in monthly fees to compensate the interconnection charges to other telecom operators…we need the rates be reduced even more…"
In fact, he argued that the lower rate will improve the sector by promoting competition which in turn will ensure only the top most services are offered at reasonable and affordable rates that earn the service providers due profits but also do not hurt the consumers' pockets.
The entire saga was brought on when, in a move to reduce the financial burden on mobile service users that change from one network to another, Tanzania Communication Regulatory Authority (TCRA) awarded the United Kingdom based consultancy firm –PwC to investigate the current price rates and it is that inquiry that led to the proposed lower rates that are now been debated.
TCRA Zonal Operations Deputy Director, Victor Nkya said the companies have no more than self interest in their agenda to keep the rates high. The changes were developed as the direct result of a comprehensive study aimed at promoting the communication sector and not destroying it as purported by the reluctant companies.
Nkya told the stakeholders in attendance that a team of officers from TCRA will prepare a report based on the discussion and the stakeholder suggestions will be submitted to the Tanzania Communication Board on January 28 of this year.
"The board will go through the recommendations…" he asserted and made clear "…the proposed rates will come into effect on the 1st of March and then continue to go down annually until December 31, 2017…"
SOURCE: THE GUARDIAN