Inflation puts pressure on telcom tariffs as TCRA says no to retail regulation

Telecoms

Mobile telephone tariffs have gone up due to high inflation and weak shilling, even as the regulator says would not control retail tariffs. After enjoying highly reduced tariffs brought about by the price war among mobile operators customers now have to dig deeper into their pockets to make calls as mobile telephone operators cite the rising inflation as the reason for ending promotions and increasing calling costs. The promotions started in May last year to August this year.

During tariffs war subscribers were making voice calls for as cheap as Sh0.25 per second to the same network at peak hours (during the day) and it was even the cheapest at non-peak hours (night).

It is now impossible, however, to make voice calls for less than Sh1 per second at peak hours in the same network anymore. Operators say they have cancelled promotions and reviewed tariffs to meet high operation costs due to rising inflation.

Inflation rose from about 4.2 per cent last October to 17 per cent now. Tanzania Communication Regulatory Authority says it does not regulate retail prices as they are determined by the market forces. TCRA Corporate Communications manager Innocent Mungy said:  “We regulate interconnection charges but the retail call prices are determined by market forces.” He noted that intervening in retail telcom business could be costly to subscribers;

“If we limit the operators at Sh5 per second, for example, would they reduce their tariffs to Sh1 per second, as they have sometimes been doing?” But some stakeholders have said there should be some kind of regulation due to the fact that there are no perfect market conditions and possibilities of cartels.

Airtel Public Relations officer (PRO) Jackson Mmbando told BusinessWeek that Airtel reviewed tariffs and made it public through the firm’s website. “The highest cost for our customers to call Airtel to Airtel is Sh2 per second from 6.00pm to 1.00pm and the lowest at Sh0.25 per second from 10pm to 6.00am. The rest is Sh1 as usual,” comments Mr Mbando.

Tigo PRO Alice Maro said the mobile telephone network provider also reviewed tariffs recently. “We have increased tariffs to meet high operational costs. However, during non-peak hours subscribers can still talk at Sh1 per second,” she said, adding that according Ms Maro, Tigo charges Sh1 per second for only first three minutes of voice call from 10pm to 7.00am Tigo to Tigo.

Vodacom did not respond when reached for comment.Information available in three operators’ websites surveyed (Airtel, Vodacom and Tigo) indicates that cost of calling the same network is at Sh1 per second exclusive of VAT from 6.am to 5.59pm and 7.00am to 5.59pm for Tigo.

From 6.00pm it increases to Sh2 per second and come back to Sh1 per second for Vodacom and Sh0.25 per second for Airtel to call within the network from 10pm to 6.00am.