UCC defends tariff move
Jun 15, 2011
Uganda Communications Commission (UCC) has defended its directive imposing an interconnect price ceiling which has sparked an uproar in the telecom industry.
By David Mugabe
Uganda Communications Commission (UCC) has defended its directive imposing an interconnect price ceiling which has sparked an uproar in the telecom industry.
David Ogong, the UCC director of competition and corporate affairs, said yesterday that UCC was scheduled to review the interconnect fee, currently at sh131 and a final decision on the tariff guideline after complete consultations with the public.
“There has been some level of pandemonium on the pricing and practices towards uncompetitive behaviour.
“While we may allow this in certain circumstances, overall in the long-term, this is detrimental,†said Ogong.
Under the new guidelines, calls within the same network will not be charged a rate below 70% of the reference interconnect fee.
The guidelines also allow consumers and operators to petition UCC about competing networks stating reasons why a tariff should be investigated.
Ogong said the regulator was empowered to ensure stability and efficient competition in the market.
Managers of telecom companies have described the move as a return to market controls.
They noted that the move would take away the good progress made by the industry in the past year.
It would also result in revenue drop for telecom operators, they argued. The sector was fully liberalised in 2006, attracting seven players.
But UCC claimed this was done in the interest of the industry.
“We want operators to promote their business, but we want subscribers to continue to enjoy the services,†Ogong explained at the UCC offices in Bugolobi, near Kampala.
He said even when there was hardly any competition in the market and telecom prices were high during the duopoly period of Celtel (Airtel) and uganda telecom, the regulator put on a price cap beyond which no operator would raise their prices.
Uganda’s subscriber budget for airtime has dropped by about 50% in one year as call rates fell by almost 60%.
But this fierce tariff war created tension in one of Africa’s most vibrant telecom markets leading to intense lobbying by operators looking for avenues to hit back and claw some market share.
Uganda Communications Commission (UCC) has defended its directive imposing an interconnect price ceiling which has sparked an uproar in the telecom industry.
David Ogong, the UCC director of competition and corporate affairs, said yesterday that UCC was scheduled to review the interconnect fee, currently at sh131 and a final decision on the tariff guideline after complete consultations with the public.
“There has been some level of pandemonium on the pricing and practices towards uncompetitive behaviour.
“While we may allow this in certain circumstances, overall in the long-term, this is detrimental,†said Ogong.
Under the new guidelines, calls within the same network will not be charged a rate below 70% of the reference interconnect fee.
The guidelines also allow consumers and operators to petition UCC about competing networks stating reasons why a tariff should be investigated.
Ogong said the regulator was empowered to ensure stability and efficient competition in the market.
Managers of telecom companies have described the move as a return to market controls.
They noted that the move would take away the good progress made by the industry in the past year.
It would also result in revenue drop for telecom operators, they argued. The sector was fully liberalised in 2006, attracting seven players.
But UCC claimed this was done in the interest of the industry.
“We want operators to promote their business, but we want subscribers to continue to enjoy the services,†Ogong explained at the UCC offices in Bugolobi, near Kampala.
He said even when there was hardly any competition in the market and telecom prices were high during the duopoly period of Celtel (Airtel) and uganda telecom, the regulator put on a price cap beyond which no operator would raise their prices.
Uganda’s subscriber budget for airtime has dropped by about 50% in one year as call rates fell by almost 60%.
But this fierce tariff war created tension in one of Africa’s most vibrant telecom markets leading to intense lobbying by operators looking for avenues to hit back and claw some market share.