Making calls within the East African Community remains expensive despite six partner states joining the One Network Area (ONA), the programme meant to remove roaming charges.
It is so expensive that one would spend less per minute when placing a call to China or India from Kenya than to Tanzania or Burundi, even though all these neighbouring States have all joined the ONA. Burundi was the latest entrant last week while Uganda, Rwanda and South Sudan had much joined earlier.
ONA was part of the East African efforts to ease the flow of trade by easing the cost of telecommunication. But the Communication Authority of Kenya (CA) data show that the network hasn’t reduced the call charges.
The Democratic Republic of the Congo and the Federal Republic of Somalia, the newest members of the bloc, have yet to join the ONA.
According to current tariff charges, it costs only Sh5.5 ($0.043) to call the US compared to Sh7 (0.054) to call Rwanda, which is the cheapest among the EAC partner states.
It costs Sh6.05 ($0.047) to call India while it takes Sh8.75 ($0.068) to make a similar call to South Sudan.
One reason for the high cost is the disparate tax regimes across the region, lack of integration of payment systems and grey traffic, which degrades the quality of calls and erodes revenue to economies. Grey traffic in telecommunication is a situation where foreign calls enter the system as though they originate locally, dodging usual route.
“It is still expensive to call within the EAC because the biggest challenges are still the unharmonised taxes. In the region when we are talking about expanding the tax base, I think telecommunication has been the sector where the public sector thinks they can derive a lot of taxes from,” said Adrian Njau, acting Chief Executive Officer of the East African Business Council.
“These high costs and unharmonised charges underscore the EABC's recommendation for EAC Partner States to eliminate and harmonise taxes and charges on roaming services as part of the ONA initiative.”
He explained, “By reducing these costs and harmonising fees across the region, the EAC can encourage more equitable and robust communication flows between partner States, thereby enhancing regional integration and economic cooperation.”
The costs notwithstanding, the telecommunications sector is still seen as one of the areas most integrated.
“Despite the liberalisation, several challenges constrain the growth of the sector. For example, based on the International Telecommunication Union 2020 data, the region is yet to cover all populations with mobile 3G data,” said Njau, referring to the basic standard for internet service.
According to the Kenya Communication Authority's Third Quarter Sector Statistics Report for 2023/24, in-bound roaming traffic from EAC partner States to Kenya showed significant variation, with Uganda's incoming voice amounting 23 million minutes, Tanzania had 83 million minutes, Rwanda (15.8 million minutes), South Sudan (2.5 million minutes), and the Democratic Republic of the Congo with 7,000 minutes. Burundi recorded the lowest inbound roaming traffic, with only 725 minutes.
Burundi had the highest average international rate at Sh100 ($0.77) per minute in 2023, followed by Tanzania at Sh43.33 ($0.33), Rwanda at Sh22 ($0.17) and Uganda at Sh12.33 ($0.093) per minute, according to the Kenya Bureau of Statistics for 2023.
The ONA is based on a key set of regulatory interventions which include eliminating charges for receiving voice calls while roaming. It is also based on a waiver of excise taxes and surcharges on incoming voice traffic while establishing wholesale and retail price caps on outbound traffic, and requiring mobile network operators to re-negotiate with their roaming partners to reduce wholesale tariffs.
Another factor why the calls remain expensive is the fact that EAC partner States party to the ONA are yet to harmonise tariffs with the different network operators in the region. For instance, Tanzania joined late last year, and therefore bilateral negotiation by all operators is yet to be concluded.
There's however some optimistism. Andrea Aguer Ariik, the EAC Deputy Secretary-General in charge of Infrastructure, said the move would ease the doing of business in East Africa and aid the free movement of persons, workers, services and capital as enshrined in the EAC Common Market Protocol.
“The entry of Burundi will reduce the high cost of mobile roaming charges in the region and strengthen the integration process because East Africans can now communicate more easily without fear of high billing charges on mobile calls whether at home or in another Partner State,” said the DSG, who spoke on behalf of the EAC Secretary General Ms Veronica Nduva.
The EAC partner states made a joint commitment in 2014 to create an ONA for the then five economies of the bloc, Burundi, Kenya, Rwanda, Tanzania, Uganda, with the benefits also extended to South Sudan when it later joined. Tanzania only joined in 2021.
“Head of States made the decision to cap the wholesale and retail rates to $0.07 and $0.1 to address what used to be very expensive,” explained Ariik who said studies to determine the challenges to enable the region to review the charges are ongoing.
“The EAC is conducting some studies to review the calling rates including the cost of data within the EAC Region. Once studies have been concluded, we will be able to compare the cost of calling within EAC and other Economic communities such as the EU.”
In a communiqué dated July 29, 2024, the Burundi Telecommunications Regulation and Control Agency (ACRT) announced the entry into force of ONA with effect from August 1, 2024.
ACRT announced new tariffs for regional roaming on the accession of Burundi to the EAC ONA.
ACRT further directed mobile network operators to clearly communicate the applicable tariffs for regional direct and roaming framework communications and apply the detailed billing to verify the communications made and the amounts invoiced, adding that this would ensure a transparent, reliable and satisfactory user experience.
