Kenya, Uganda reach deal on cross-border call rates

What you need to know:

Taxes levied on international calls by Uganda and Rwanda to be reviewed after the June budgets.
Kenya had clashed with the neighbouring countries over its demand for an immediate introduction of a common termination tariff to reduce the cost of doing business.
Tanzania was left out of the deal because it had missed a number of talks that led to the pact.

Kenya has struck a deal with Uganda and Rwanda over the lowering of roaming charges in an agreement that has left out Tanzania.

ICT secretary Fred Matiang’i said taxes levied on international calls by Uganda and Rwanda would be reviewed after the June budgets and that details of the agreement will be made public on May 2.

Kenya had clashed with the neighbouring countries over its demand for an immediate introduction of a common termination tariff to reduce the cost of doing business while the two countries wanted a study conducted to inform the changes.

“We have already identified key factors that contribute to high roaming charges across the region and on May 2 we will be having a meeting where we will announce the new policy that will bring the charges down,” Dr Matiang’i said on Wednesday during the Connected Kenya summit in Mombasa.

“The roaming charges in the region are very high due to the different tax regimes levied by the governments.”

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 nine shillings 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 the United States or India.

READ: Mobile call tariffs to fall as East African states scrap levies

But Tanzania was not part of the deal because it has missed a number of talks that led to the pact.

Tensions erupted in public last year when Tanzania complained it had been sidelined by Kenya, Rwanda and Uganda over plans to unify their customs and speed up moves towards political federation. Burundi is also a member of the bloc.

Tanzania later said those differences had been patched up but added the country —which critics say has dragged its feet over closer ties —remained wary of any swift drive towards a political union.

Kenya is the only East Africa state that does not levy any taxes on cross-border calls and wants a common termination tariff introduced.

On Wednesday, Jean Philibert Nsengimana, the Rwanda Minister for Youth and ICT said his government is willing to harmonise the calling rates.
“We are ready to harmonise the tariffs by either lowering or eliminating the taxes,” Mr Nsengimana said.

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.

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 amplified calls to bring down the roaming rates in the region.