Increased power shortage pushes phone tariffs high
May 05, 2006
Increased operation costs due to rampant power shortage have driven companies to increase product prices.
By Emmy Olaki
Increased operation costs due to rampant power shortage have driven companies to increase product prices.
The three telecommunications companies of MTN, Celtel and uganda telecom, have all hiked tariffs, reflecting a 5% increase.
Erik van Veen, MTN’s chief commercial officer, attributed the increase to the power problem.
He said the company spends sh1b a month to run generators.
This is in addition to other costs, representing an increase of between 30% and 40% in costs, van Veen.
“This (increase in costs) has influenced our costs base and compelled us to increase tariffs. But the increase is just 5%, which is below the current inflation rate,†van Veen said.
He said even with the increase, MTN Uganda’s rates remain the lowest within the MTN Group, which operates in 21 countries.
“This will however have almost no impact on the industry as a 5% increase is insufficient to make a big difference,†van Veen said.
Celtel’s marketing director, Caesar Mloka, said most of their sites have been running on electricity but had been replaced with generators.
“We have to make sure that people continue to communicate. If there is no power, we have to use backup power (Generators).
“Previously, we were doing a few hours with generators, but today there is no power for almost 24 hours,†she said.
van Veen said the industry has been cushioning increasing costs over the past three years, save for those resulting from increase in excise duty.
Overall, manufacturers and other service providers, are likely to increase charges, due to increased costs of operation.
Miriam Wanjohi, the uganda telecom mobile brand manager, said previously, there was no need to have generators at every base station.
“But now power is unpredictable. One station might have power for two hours, then it goes off, others will not have power for 24 hours, necessitating a generator at every station. Also, fuel prices keep going up,†Wanjohi, said.
uganda telecom’s tariffs have gone up by sh20.
“It is unfortunate that we had to increase, but it was inevitable.
“Nevertheless, we still have the cheapest rates,†Wanjohi said.
Increased operation costs due to rampant power shortage have driven companies to increase product prices.
The three telecommunications companies of MTN, Celtel and uganda telecom, have all hiked tariffs, reflecting a 5% increase.
Erik van Veen, MTN’s chief commercial officer, attributed the increase to the power problem.
He said the company spends sh1b a month to run generators.
This is in addition to other costs, representing an increase of between 30% and 40% in costs, van Veen.
“This (increase in costs) has influenced our costs base and compelled us to increase tariffs. But the increase is just 5%, which is below the current inflation rate,†van Veen said.
He said even with the increase, MTN Uganda’s rates remain the lowest within the MTN Group, which operates in 21 countries.
“This will however have almost no impact on the industry as a 5% increase is insufficient to make a big difference,†van Veen said.
Celtel’s marketing director, Caesar Mloka, said most of their sites have been running on electricity but had been replaced with generators.
“We have to make sure that people continue to communicate. If there is no power, we have to use backup power (Generators).
“Previously, we were doing a few hours with generators, but today there is no power for almost 24 hours,†she said.
van Veen said the industry has been cushioning increasing costs over the past three years, save for those resulting from increase in excise duty.
Overall, manufacturers and other service providers, are likely to increase charges, due to increased costs of operation.
Miriam Wanjohi, the uganda telecom mobile brand manager, said previously, there was no need to have generators at every base station.
“But now power is unpredictable. One station might have power for two hours, then it goes off, others will not have power for 24 hours, necessitating a generator at every station. Also, fuel prices keep going up,†Wanjohi, said.
uganda telecom’s tariffs have gone up by sh20.
“It is unfortunate that we had to increase, but it was inevitable.
“Nevertheless, we still have the cheapest rates,†Wanjohi said.