A majority of mobile network operators in the region will take a hit in their revenues from data roaming charges after new caps proposed for the East African Community (EAC) One Network Area (ONA) are approved.
A source sitting at the EAC technical committee on communication told The EastAfrican that a meeting with the sector regulators from the region last week settled on capping data roaming charges at $0.005 (Sh0.65) per megabyte (MB).
If approved, the rates will significantly cut revenues for regional telecommunication companies, most of which have their roaming tariffs way above what will now be the maximum chargeable within ONA member countries.
“Once approved by the EAC Council of Ministers, which we anticipate will be sometime in May or June next year, the new caps will go into effect immediately and operators will have to comply,” said the source who requested anonymity because they’re not authorised to speak for the secretariat.
This is the first time the community has introduced caps on data and text messages since establishment of the One Network Area in 2014, when only a maximum rate for voice tariffs was set.
ONA currently has six of the eight member countries namely Kenya, Uganda, Tanzania, Rwanda, South Sudan, and Burundi, which joined just this year and is still of harmonising its telecommunications sector with the network’s requirements.
Currently, most of the telcos in the region have complied with ONA voice tariff cap, which is $0.007 per minute, but many have their own rates on data and SMS roaming, as the community had not adopted a common tariff.
A spot check by The EastAfrican reveals that most telcos have currently priced their data roaming charges within the area above the proposed caps, with some charging as high as 40 times more.
Roaming charges published by the telcos on their websites show that currently, only Airtel Uganda and Airtel Tanzania currently charge $0.0037 (Sh0.48) and $0.0016 (Sh0.21) per MB respectively,
Airtel Kenya has the most expensive roaming charges for data in the region, currently at $0.32 (Sh40.96) per MB, followed by Vodacom Tanzania, which charges $0.3 (Sh38.24) per MB.
Kenya’s Safaricom currently charges at least$0.023 (Sh3) per MB for data roaming within the region, also above the newly set cap, nearly by more than ten times in both cases.
MTN Uganda and MTN Rwanda are also charging data roaming in the region above the new caps, currently at $0.0082 (Sh1.06) and $0.0073 (Sh0.95) respectively.
The source intimated that when consulted, telcos in the region objected to the new caps, but the council settled on them in order to help ease trade and the movement of people in the region.
“If the telcos can charge that amount, it will be cheaper for communication in the region, and will be easier for trade in the region, that’s why the technical council settled on that cap,” they said.
The rate was arrived at after benchmarking in the European Union (EU), the Southern Africa Development Community (SADC), and the Association of South East Asian Nations (ASEAN), the source said.
To ensure compliance, the council decided that “there will be a technical team that will oversee the monitoring and evaluation of the implementation of the framework and enforcement,” the source disclosed.
The technical team is expected to work closely with sector regulators from each of the member countries to ensure compliance, as there has been weak enforcement of the existent voice caps currently.
With the resolution of the technical committee, it now moves to the Sectoral Council or Committee of Communications, which constitutes ministers of communications from the member countries.
The proposal will then move to the EAC Council of Ministers, which is the bloc’s central decision-making organ, constituting ministers in charge of regional cooperation from each of the member countries.
Should it be adopted by the Council of Ministers, it will automatically become law, forcing the telcos to review their charges, ultimately impacting their revenues from roaming.
Roaming constitutes significant revenues to the telcos. Safaricom, for example, earned $88.5 million (Sh11.5 billion) from roaming, bulk SMS and its airtime borrowing service in the year to March 2024, and spent $96.2 million (Sh12.5 billion) on roaming and interconnect fees paid to other operators across the globe.
Source link : https://nation.africa/kenya/business/telco-blow-as-eac-sets-caps-for-data-roaming–4797932
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Publish date : 2024-10-19 08:34:34
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