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The East African : May 12th 2014
8 The EastAfrican NEWS MAY 10-16,2014 LINKING EAST AFRICA Cross-border calls, Internet to cost less in new single network agreement Ministe≥s ag≥ee to ≥educe tax on calls by 20 pe≥ cent f≥om August this yea≥ By SCOLA KAMAU Special Correspondent M obile phone users in East Africa will from August en- joy a 20 per cent cut in tariffs on cross-border calls as the countries move towards a single area network by the end of the year. Ministers from Kenya, Ugan- da and Rwanda agreed during the recent fifth Northern Corridor meeting in Nairobi to harmonise taxes, leading to a reduction of charges for short text messages, voice and data. Regulators have been asked to enforce the decision. According to Kenya’s Cabi- net Secretary for ICT Dr Fred Matiang’i, Tanzania and Burundi, which are not party to the Partnership on Instrastucture for the Northern Corridor, will be invited to be a part of the single area network, which is expected to remove roaming charges. “I plan to meet with my coun- terparts in Dar es Salaam and Bujumbura to reach out to them to join in,” Dr Matiang’i told The EastAfrican. The single area network will be set up after a two-phase consultative process: All regulators will meet in Kampala this month, followed by a joint meeting of regulators and mobile network operators. Uganda, Tanzania, Rwanda, Kenya and Burundi recently introduced taxes on international calls, making it more expensive to call across borders. The taxes, averaging $0.12 per minute, have been cited as a non-tariff barrier that could slow trade within the East African Community. “Managing the telecommu- nications sector is one pillar of managing the region’s security challenges as well as enhancing regional trade,” Dr Matiang’i said, adding that the creation of the area network would eventually result in harmonisation of mobile money platforms across the region. This aspect is, however, being handled by the ministers for finance. The EAC countries hope to roll out a blanket waiver on all roaming charges by the end of this year. The agreement by the partner states to implement a regional single-area network by December 2014 is part of an EAC decision to harmonise ICT infrastructure and policies in Kenya, Uganda, Tanzania, Rwanda, Burundi and South Sudan, following a directive by the integration projects’ summit of presidents on February 20 in Kampala. The cost of calling across East Africa rose sharply in October last year as Kenyan telcos increased their charges in response to taxes being levied by countries in the region. Kenyan mobile companies threatened to levy charges on calls generated from the other four countries as well as encourage international operators to transfer their calls through routes (bulk carriers), which would be hard for governments to monitor, potentially denying them millions of dollars in revenue. Safaricom increased charg- es to Rwanda and Uganda to Ksh27.50 ($0.32), blaming the high taxes introduced in the two countries. Currently, the cost of regional roaming is higher than the cost of calling Europe and other international destinations. While calling the US from Kenya costs $0.03 a minute, the other countries in the region charge up to 10 times more. Burundi charges $0.16 for calls coming from Kenya, Tanzania charges an $0.12, Uganda $0.09 and Rwanda $0.3. A call to Kenya from Rwanda costs $1. International calls, analysts said, have emerged as a big contributor to the revenues of most telecom firms in the region as more people participate in crossborder trade. Data shows Kenya, for exam- ple, exports approximately 18 million minutes every month to East Africa, meaning the country has been contributing approximately $2.16 million every month to the governments of Uganda, Tanzania, Rwanda and Burundi in taxes on international calls. The new directives will, how- ever, bring down this contribution. Due to high roaming rates, customers have been forced to buy several sim cards to use in different states. An agreement to develop and put in place a harmonised legal and regulatory framework for effective SIM card registration including linking the process to respective national ID databases, could save citizens a requirement to register multiple cards to local tariff levels. As such, any changes in pricing will be effected after these taxes are removed and Safaricom will pass on this benefit directly to our customers in reduced calling rates,” said Nzioka Waita, corporate affairs director at Safaricom. To lower the cost of Internet, states resolved to set up a system — the East Africa Internet Exchange Point (EAIX) — that will enable increased electronic data exchange within the region without using the international circuit by 2015. This is expected to drive cost of border connectivity down. States will generate capital for the region as ISPs pay to host servers within the region enabled by the virtual EAIXP. “The exchange will reduce the portion of ISP traffic that must be delivered via the relatively more expensive upstream Internet traffic providers [international circuit], reducing the average per bit cost of their service and by extension the cost of $2.16m East African countries plan to scrap roaming charges by the end of this year. Picture: File in different countries. The plan faces a challenge as not all member states have issued IDs. Kenya and Rwanda have IDs while Uganda, Tanzania and Burundi are in the process of issuing them. The decision to waive the roaming charges by 20 per cent from August is yet to be formally communicated to the telcos who, however, acknowledged they were privy to the talks to remove all roaming charges by the end of this year. “The concern with regional roaming charges is primarily driven by the taxes on international calls which have been imposed by a number of governments within the EAC. The challenge has been to persuade these governments to remove these taxes which will allow operators to reduce roaming charges DIGITAL MIGRATION DEADLINE: The EAC Ministers agreed to speed up the migration from analog to digital television broadcasting, including exploring of possibilities of ensuring a switch before the ITU deadline of 2015. NEW DATES : While Tanzania and Rwanda have issued decoders, Kenya’s digital migration has been postponed several times. Last month, the Supreme Court set the new date as the end of September, this year after the government sought the intervention of the court to nullify a ruling by the Court of Appeal cancelling digital licences issued by the Communications Commission of Kenya, now Communication Authority of Kenya. BLAME GAME: Uganda’s Auditor General has blamed the Uganda Communications Commission for delays in the roll-out of digital broadcasting, saying the regulator was unable to complete its tasks. The amount Safaricom pays EAC countries per month in taxes their service to consumers,” said Francis Wangusi, director general of the Communications Authority of Kenya. The ministers directed that financing mechanisms be discussed and agreed upon by all members. EAIX experts in a meeting in Kenya early this year said the national points in Kenya, Uganda, Tanzania and Rwanda require sophisticated technology to leverage the bandwidth to handle regional capacities, requiring huge investments. Access to Internet “Some areas across the region have neither access to the Internet nor mobile connectivity; the exchange point can only lower the cost of operations if it is relevant to all areas,” said Fiona Asonga, chief executive officer of the Telecommunications Service Providers Association of Kenya (Tespok). The ministerial report recom- mends that all infrastructure projects incorporate fibre optic access, which experts said if implemented will drive down Internet costs and speed up regional data transmission as operators are enabled to transmit huge amounts of data easily and cheaply. “A reduction in the average unit cost of last mile and intercountry leased lines or links will contribute largely to reduction in Internet costs in the EA region as it will ultimately drive down the cost of leased lines due to economies of scale,” said Meoli Kashorda, executive director of the Kenya Education Network, adding this partly depends on competition policies as well as increased regional traffic.
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