Commodities

East African Community states set to reduce calling rates

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By  MARK OKUTTAH

Posted  Friday, December 20  2013 at  02:00

In Summary

Unaffordable. Taxes have made it expensive to call within East Africa.

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Nairobi- Making phone calls within the region is likely to become cheaper after the governments of Uganda, Kenya, Rwanda and South Sudan said they would scrap roaming charges and cap the fees mobile operators charge one another for terminating calls.

Kenya ICT Cabinet secretary Fred Matiang’i said that the four governments would set up a technical committee to review taxes charged on calls and have a common position by February.

“After three days of fruitful meeting we have come up with a number of proposals such as exempting calls from the region taxes and putting a cap on the interconnection rates,” said Mr Matiang’i.

ICT ministers John Nasasira of Uganda and Jean Nsengimana of Rwanda attended the meeting with a view to harmonising policies in East Africa and reduce the cost of doing business.

East African countries, apart from Kenya, have introduced specific taxes on international calls within the region which have had a direct adverse impact on roaming and calling rates.

In June, Uganda introduced a Shs203 levy, Tanzania charges Shs290, Rwanda Shs261 and Burundi Shs377. This means any calls made by a Kenyan when roaming or directly from Kenya are subjected to the taxes, significantly increasing the cost.

The taxes have made it expensive to call Uganda or Rwanda compared to calling United States or India. Safaricom charges Shs798 for calls to the two neighbouring countries compared to Shs87 to India.

This situation is replicated in the Telkom Kenya network where calls to the UK can cost as little as Shs58 per minute while subscribers calling Uganda are charged at least Shs522 per minute.

The formation of the East African common market that allows free movement of capital, goods and people in member states has seen calls to bring down the roaming rates in the region.

Mr Nasasira, EAC ICT integration committee chairman, said that the three countries would also harmonise policies on cyber security and SIM card registration in order to curb crime perpetrated through mobile phones.

“Our experience in Uganda with the attack that happened during the World Cup period and the recent Westgate attack in Kenya has shown that it’s only through collaboration among our nations that we can prevent such attacks,” he said.

High Roaming Rates
Roaming and international calling charges in East Africa are higher than those in Asia and Europe despite the pursuit of economic and political integration. The high tariffs are caused partly by taxes and constitute a trade barrier.

Mobile operators blame the high roaming rates on taxation of international traffic which was introduced recently. “Tackling taxation is critical to manage the high cost of roaming in the region.

This should be addressed immediately before considering a cross border cost study, which may take a long time, as the gains from removal of taxes will be immediately passed on to customers,” Safaricom chief executive officer Bob Collymore said on Wednesday.