Interconnection charges row heats up in Namibia

Telecoms

Telecom Namibia and Cell One have ganged up against MTC over what they regard as exorbitant interconnection fees charged by MTC. They have appealed to the Namibia Communications Commission (NCC) to intervene.

Last month Cell One brought the matter to the attention of the Minister of Information and Communication Technology, Joel Kaapanda, saying the interconnect costs are prohibitive for new entrants. Last week Telecom Namibia joined Cell One in its call for fair pricing, saying its "business is being disadvantaged by the unfair tactics of MTC which charges exorbitant interconnection fees from their network to fixed lines".

MTC's General Manager of Corporate Affairs, Albertus Aochamub, rubbished the claims, saying the rates were offered to MTC by Telecom Namibia and Cell One, "contrary to claims by both parties when they have finally woken up to realise that their businesses are bleeding from mistakes they have made in the past.

MTC never imposed the regime (interconnection rates) but accepted what was proposed by both Cell One and Telecom Namibia". It would appear that MTC is using its dominance in the cellular market that was strengthened through years of monopoly. The cellular market was opened to a second operator, Cell One, last year.

According to Telecom Namibia, MTC charges its subscribers up to N$3,35 per minute to call a land line, while Cell One charges N$1,79 per minute. Cell One pays MTC N$1,06 per minute and charges its customers N$1,79, retaining 73c per minute while MTC gets N$1,06.

For calls to South Africa, MTC charges its subscribers N$5 per minute to fixed and N$5,81 to cellular phones, while the Telecom rate is N$1,99 to fixed and N$1,99 to mobile during the day and N$1,19 and N$1,99 at night. MTC charges for calls to Angola and Europe are even more outrageous at N$12 per minute - more than double the Telecom charge of N$5.

"The huge gap in interconnecting charges not only discourages customers from calling the Telecom Namibia network, but also make service unaffordable for many Namibians, inasmuch as the interconnection rates are arbitrarily set and thus not cost based," Telecom's Oiva Angula said in a hard-hitting statement issued last week.

Angula proposed that interconnection charges be cost based. He called on the NCC to provide guidelines to establish rates through negotiations among the operators.

"Cost-based interconnection charges should incorporate a normal commercial return, and there should not be any discrimination among different operators, unless a cost difference justifies dissimilar treatment," Angula argued.

Aochamub claimed that MTC's services and costs were "competitive and affordable".

He also took a swipe at Telecom saying it enjoyed "unhindered statutory monopoly" and was taking a large percentage for every international call originating from Telecom Namibia because of its monopoly of this service.

The Ministry of Information and Communication Technology recently said that all issues governing telecommunication will be addressed by the long-awaited Communications Bill, which is yet to be tabled in Parliament.

The Namibian