ICT secretary Fred Matiang’i at a function early this year. He says levies on mobile phone calls have made doing business in East Africa costly. Photo/DIANA NGILA
What you need to know:
Kenya wants a common termination tariff introduced immediately in a bid to reduce the cost of doing business
Uganda and Rwanda oppose Kenya’s position but instead call for a study on levies.
Kenya has clashed with Uganda and Rwanda over the removal of roaming charges and capping of termination charges by mobile operators in East Africa.
Kenya wants a common termination tariff introduced immediately in a bid to reduce the cost of doing business while the two countries want a study conducted to inform the changes.
ICT Cabinet Secretary Fred Matiang’i said that taxes levied on international calls by Uganda, Rwanda and Tanzania had increased the cost of doing business in the region.
“I have firm instruction from the President that we should not take a policy decision that will increase the cost of calls. The current cost of calls to our neighbours is hurting businesses and by saying we conduct a study first is just a waste of time,” Dr Matiang’i said.
The ICT ministers from three countries and South Sudan met in December in Nairobi and formed national technical committees to review taxes charged on calls with a view to introducing common calling rates in the region.
The technical committees were to settle on a common position before a meeting of East Africa head of states set for Friday in Kampala.
The committees are expected to meet today in Uganda to collate the proposals but Kampala and Kigali are understood to be reluctant on wholesale changes without the benefit of a study.
“We agreed with the three states that we should have one network by exempting taxes on international calls on call originating and terminating within the East Africa region and which are among the issues that we are going to discuss,” said Dr Matiang’i.
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.
Roaming enables a mobile phone subscriber travelling abroad to access services from one’s service provider.
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 Sh7 levy, Tanzania charges Sh10, Rwanda Sh9 and Burundi Sh13. This means any calls made by a Kenyan when roaming or directly from Kenya are subjected to the taxes.
The levies have made it more expensive to call Uganda or Rwanda compared to calling United States or India. Safaricom charges Sh27.50 for calls to the two neighbouring countries compared to Sh3 to India.
This situation is replicated in the Telkom Kenya network where calls to the UK can cost as little as Sh2 per minute while subscribers calling Uganda are charged at least Sh18 per minute.
The formation of the East African common market that allows free movement of capital, goods and people has seen amplified calls to bring down the roaming rates in the region.
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