[The Namibian] Mobile calls using local networks will be drastically cheaper from the beginning of July after the Namibian Communications Commission (NCC) slashed interconnection charges by up to 43 per cent with the introduction of a standard charge structure.
As from last Wednesday, interconnection charges for all mobile calls, whether mobile-to-mobile (MTR), mobile-to-fixed line, fixed line-to-mobile (FTR) or international-to-mobile through Telecom Namibia are 60 cents plus an international settlement rate per minute or part thereof.
Previously, interconnection charges for mobile-to-mobile calls were N$1,06 per minute or part thereof, while 63 cents per minute were charged for mobile-to-fixed line and fixed line-to-mobile calls. International calls received locally on mobile phones through Telecom Namibia were subject to interconnection charges of 59 cents per minute.
The new rate marks the beginning of the NCC's plan to phase in the structure in four phases, ending January 2011, when a single charge of 30 cents per minute or part thereof will apply.
Interconnection charges for MTR calls will then be 72 per cent cheaper, while charges for FTR calls will drop by 52 per cent. Interconnection fees charged for international-to-mobile calls via Telecom Namibia will be 49 per cent less.
The charge ceiling will be reduced again in the beginning of January and July next year, and in January 2011. It will be cut by ten cents every time.
The NCC announcement follows after Cell One and Telecom Namibia accused MTC of exorbitant interconnection charges in August last year, claiming it discouraged new entrants to the market, and appealed to the NCC to intervene. Telecom Namibia, MTC and Cell One agreed to this "compromised rate model" last month.
In their statement, the NCC said it is clear from international best practice that "asymmetric termination rates are not the best tools to facilitate market entry".
"More effective mechanisms exist that do not lead to economic distortions and entrenched traffic imbalances," the NCC said.
Regulators across Europe and Africa agree that these rates should be based on the cost of the service, with the NCC following suit.
They commissioned a benchmarking study by Research ICT Africa, who found that the cost of termination, of interconnection charges of an efficient operator in Namibia is 24 cents.
"The prescribed ceiling for January 1 2011 for termination rates includes a 25 per cent mark-up over the estimated cost of termination," the NCC said.
However, operators can negotiate lower rates or request a revision of rates, the commission said.
"The NCC will closely monitor the market developments and a review of termination rates will be conducted every two years to ensure that termination rates are kept current in light of declining cost and rate trends," they added.
According to the NCC, Cell One and MTC have asked for further regulatory interventions to level the playing field. These are currently under consideration.
NCC Slashes Mobile Charges