Whereas mobile phone call rates have been reducing in Uganda, they remain high compared to Tanzania and Uganda. Photo / Edgar R Batte
Until 2004, mobile phone subscribers were paying as high as Shs440 for off-network calls and Shs380 for on-network calls per minute.
The tariff rate was not the only cost subscribers were paying - they were also paying an average of Shs20,000 as service fees.
Mobile phones had by then been a reserve of affluent Ugandans, but the entry of MTN in 1998 and later Uganda Telecom broke the Celtel monopoly, resulting in modest competition.
However, access was still confined to a few elite Ugandans in the corporate and business space.
On the whole, prices had by then dropped from a high of more than $1 per minute at the time when Celtel was the only company in a market that was just getting used to liberalism and an open economy.
By 2000, call rates had come down to an average of Shs620 for off-network calls and Shs550 for on-network calls per minute, and service fees across all networks had been dropped.
However, the average call tariffs remained out of the reach of many Ugandans.
But the entry of more telecoms into the market in the late 2000s and the acquisition of existing ones by multinationals heightened competition and by 2010 there had broken out a price war that eventually revolutionalised the telecommunications sector.
Start of a price war
In September 2010, Zain, formerly Celtel, MTN, and Uganda Telecom (now UeTCL) cut call rates with the tariff war taking on a new face, a week after Warid Telecom, which was later acquired by Airtel, reduced its calls across all networks to Shs60 per minute.
Unlike Warid, MTN cut its rates to Shs3 and Shs6 per second within and outside its network, respectively, while UTL reduced to Shs4 and Shs5 per second to call within and outside its networks.
Zain (now Airtel) cut to Shs3 per second to call across all networks but has since increased to Shs4.
The rates above translated to a market average of Shs180 per minute for on-network calls and Shs280 for off-network.
However, they have since increased to an industry average of Shs240 per minute.
UCC had by then structured a mobile termination rate of Shs181 per minute but had by 2015 reduced it to Shs65 per minute, before reducing it further to Shs55 per minute in 2019. The rate was reduced further to Shs45 in 2023.
Mobile termination rates are significant in determining how phone calls between different networks are charged. The rate also determines the fee that one telecom pays the other when a call is channeled through its network.
Despite the reduction at the regulatory level, mobile phone call rates have remained high compared to other East African member states.
Currently, telecoms charge an average of Shs4 per second, which translates to at least Shs240 per minute for both on and off-network.
The call rates in Uganda are way higher compared to Tanzania’s average of Shs39.73 per minute and Kenya’s average of Shs110.8 per minute.
This remains a concern among mobile phone subscribers, and Uganda Communications Commission says it has received several complaints regarding the cost of calls.
The complaints, however, come at a time when UCC says it is reviewing the cost of making calls in a country in which just two telecoms - MTN and Airtel - share a market share of more than 95 percent between them.
Last week, Mr Ibrahim Bbossa, the UCC head of public relations, said there was an ongoing study that will inform the movement of mobile termination rates in the next five years.
The study, he said, will subsequently feed into the larger plan of reducing call rates for mobile phone operators.
“There is an ongoing costing study aimed at determining the future trajectory of the mobile termination rates over the next five years. This study is anticipated to conclude in July 2025 and is expected to address all pertinent questions regarding the mobile termination rate adjustments and their implications for the telecommunications sector,” he said.
Comparatively, in Tanzania, the mobile termination rate charges for domestic calls are 13 times lower, while in Kenya, they are four times cheaper than in Uganda.
The Tanzania Communications Regulatory Authority capped the mobile termination rate to Shs2.3 (Tsh1.68) per minute, while the Communication Authority of Kenya last year reduced the rate from Shs28 (Ksh0.99) per minute to Shs11.5 (Ksh0.41).
The above termination rates for Tanzania and Kenya are way lower than Uganda’s Shs45, which could also be a factor for the high call rates in Uganda compared to the two countries.
Over the past decade, mobile telephony regulators across East Africa have been reviewing mobile termination rates downwards to keep retail prices low and check anti-competition tendencies while ensuring the businesses are profitable.
Mr Evariste Rugigana, the Rwanda Utilities Regulatory Authority director general of told The EastAfrican last week that the termination fee there is “zero” per minute, which means operators do not collect local incoming interconnection revenue at all.
A shift towards data and internet connectivity could have driven a reduction in mobile termination rates, especially in Tanzania. Photo / File
Influence of data
The reduction in mobile termination rates in some countries could also have been influenced by the increase in usage of data.
A bulletin by Incyte Consulting, a UK-based telecommunication policy advisory firm, indicated that Tanzania is shifting towards the use of data, which could have played a significant role in driving mobile termination rates downwards.
However, it is not only Tanzania that is pursuing a shift from voice to data calls. Across East, mobile phone subscribers spend more on data compared to other telecommunication services.
In Uganda, for instance, a report by UCC noted that in the three months to June 2024, mobile phone subscribers registered an 11 percent increase in money spent on data to a monthly average of Shs8,234 from Shs7,327, which is equivalent to four gigabytes.
This was higher compared to voice expenditure on the same network calls, which reduced to Shs4,534 from Shs4,872.
