Tuesday, 12 February 2013

Rwandans cry foul over high call rates


“This is daylight robbery! We are being exploited and our businesses are suffering, thanks to the high call tariffs that are hanging over our heads like vultures,” complains a bitter Mudando, a businessman in Remera, Kigali. 

Mudando’s sentiments reflect the general feeling among the public that mobile telecom companies are ripping them off with exorbitant call fees. According to the ordinary Rwandan, making a call should not be as expensive as it is today since there are three telecom firms operating in the country. 

These are MTN, the pioneer mobile telecom company in Rwanda, Tigo and latest entrant Airtel. 

According to available data, Airtel charges Kigali residents Rwf20 per minute and Rwf5 upcountry people for on-net calls. For MTN, it is Rwf22 between 11.00am and 2.00pm a minute and Rwf45 per minute early morning and evening hours, while Tigo charges Rwf22. All the telecom firms charge Rwf60 for calls across network. 

For international calls, Tigo charges between Rwf120 and Rwf240 per minute, depending on the region. Calls to special regions, mostly island nations, cost Rwf800 a minute. MTN international calls prices are between Rwf123 and Rwf285. 

The local telecom sector ceased being sort of a monopoly with the coming on board of Tigo five years and Airtel, almost a year ago.

Despite the growing competition in the sector, many people say they have not yet benefitted in terms of reduced call and data rates. 

Others acknowledge that the tariffs have reduced, but argue that the reduction in call rates is minimal to be felt by users.

“There is a slight change in tariffs, especially for international calls, which I think resulted from the growing competition in the sector. However, local calls are still expensive, especially when you call a different network,” says Pelerin Mubanga, a business owner in Nyarugenge.

He adds that though he would have liked to switch networks, his business contacts and clients would be inconvenienced, leaving him in a dilemma. 

Many people interviewed by Business Times say price wars between the three mobile phone operators have not benefited them and are used to hoodwink them and later to be only exploited by the telecoms.

For 60-year-old civil servant working with the Ministry of Commerce, the current competition among telecoms cannot guarantee low call rates.

“There is no competition at all. They are only tricking us to join the networks. But when you switch service providers, you later discover that they are all the same; they are after fleecing us of our hard-earned money,” argued the elderly civil servant, who requested for anonymity.

“If there was ‘real’ competition, we wouldn’t be obliged to subscribe to every network to benefit from good rates; we would just choose one and use it to make calls without fear of high prices.”

However, people look at the increase of telecoms in different ways. For those, who earn a living from telecom companies, the rise in number of service providers has brought marked changes.

“It is useful to have various companies because it helps in accessing cheap mobile phones on the market, high call rates notwithstanding,” Firmin Wilson Nsanzimana, a Tigo freelancer dealer, says. “Today, people in rural areas also access telephone services, thanks to presence of many operators,” he adds. 

Jonas Niyokwizerwa, a 20-year-old airtime card seller in Kigali, says more telecom operators mean better business.

“This is more profitable than selling those of only one brand. So, having more companies has helped a lot compared to if there was only one operator; we wouldn’t be in business,” argues Niyokwizerwa, who has been in the business for eight months and he sells airtime cards of all the telecom firms.

What telecom operators say

As people with varying eye defects see things differently, telecom operators believe the increase in the number of operators has greatly benefitted subscribers, especially in terms of lower call rates Controversy to subscribers views.

David Kezio-Musoke, the MTN head of public relations, says their services and products are affordable as their tariffs have reduced to foster the growth of an ICT hub in Rwanda. He notes that competition brought by the multiple operators has highly contributed to the reduction in call and data rates, and expanded access to telephone services to many Rwandans.

“When we were operating in a monopolistic environment, our on-net tariff (MTN to MTN) was Rwf120. When other operators joined the market, it dropped to Rwf90 and then to Rwf45,” explains Kezio-Musoke.

“Competition opens markets in many ways. It took us about 10 years to attract one million subscribers, but when competition was introduced, our subscriber base doubled in less than four years,” he adds. 

“Competitors are our business partners. For example, we share the infrastructure. Through the regulator’s site (tower) sharing policy, competitors pay us renting fees.”

They also pay us interconnection fees generated from off-net calls and we do the same. So the competition is healthy.

Alex Munyaneza, the Airtel customer service manager, says their rates are competitive. 

“That’s why we have been able to attract 500,000 subscribers after only 10 months in the market,” Munyaneza says.

“This is something to celebrate. It shows that people are enjoying our services and rates as Airtel relies on the person-to-person marketing model.”

Although Airtel has lower on-net rates, interconnection call prices are also still high like those of its competitors. A cross-network call costs Rwf60 per minute. Only Tigo charges half this rate.

“When one is in business, he doesn’t want to make losses…Airtel alone cannot reduce off-net call rates because we, too, pay for calls that go to other networks,” says Munyaneza

He notes that it is only the regulators and telecom owners that can address the issue of high interconnection call rates.

Policy-makers, regulator speak out

Good and cheaper services are common in every telecom operator’s mission and vision, where they pledge to access people with affordable mobile telephony. And they should be commended as mobile telephone penetration has risen from under 10% to 53% in only five years.

Didier Nkurikiye, the head of ICT in the Ministry of Youth and ICT, notes that although a lot has been done, efforts should be doubled to deepen the use of ICT and mobile telephony in Rwanda.

“I can say that a lot has been done, but still there is more to do. Besides, everyone wishes that people could afford and feel comfortable with call prices,” he says.

Jean Philbert Nsengimana, the youth and ICT minister, called on the industry players and the regulatory authorities to ensure the cost of going mobile or ‘smart’, as he calls it, is not prohibitive, arguing that this would enhance ICT penetration.

“We need more innovative solutions to maximise the value of being connected. This will result into higher levels of ICT and broadband penetration, which in turn impacts economic growth.”

The Rwanda Regulatory Authority December 2012 statistics indicate that mobile phone subscribers are 53.1% of the population or 5,690,751 people.

Of these, MTN leads with 3,432,755 subscribers; Tigo 1,866,924 and Airtel had about 391,072 customers.

Rates recommended by RURA

Although interconnection rates are at Rwf60 a minute, it should be about Rwf29 today, according to the Rwanda Utilities Regulation Authority (RURA)magazine of June 2011. 

“The first Amendment to the interconnection agreement entered into between MTN Rwandacell and TIGO on August 6, 2009, indicates the domestic interconnection rates for voice that has changed as follows, effective July 1, 2011: Rwf35.79 (2011), Rwf32.02 (2012), Rwf28.65 (2013), Rwf25.64 (2014 and Rwf22.94 in 2015.

Note that these rates are far cheaper than the market rates today. So, why are telecom firms contravening these guidelines? Unfortunately, efforts to talk to RURA officials over the matter were futile as all they did not answer their phones  or return our calls. 

It is only recently that Tigo started advertising a reduction on interconnection call rates to Rwf30 per minute call, which should have been done two years ago. Even then, this should be at Rwf28.7 per minute. Other firms are yet to be seen to serve customers according to RURA guidelines.

A look at regional call tariffs 

In Kenya, calls rates are at between Ksh1.44 and Ksh5 per minute for on-net and off-net calls respectively. It costs between Ugsh2 per second or about Rwf28.8 per minute and Ugsh6 per second (about Rwf86.4 a minute to make a local call. International calls across the networks cost Ugsh450 (about Rwf108) and above depending on region or country.


Unknown said...

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Unknown said...

I have found here much useful information for myself. Many thanks to the editors for the info.

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Unknown said...

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