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Vodacom worried by Tanzanian fee cuts

Bloomberg Dar es Salaam

Vodacom Group’s Tanzanian unit was concerned that a proposed reduction in interconnection fees might curb investment in telecoms infrastructure in the east African nation, it said yesterday.

The Tanzania Communications Regulatory Authority said on Friday it might lower the rate that cellphone companies charged each other for calls across networks by as much as 69 percent from March, to boost competition. The regulator will decide on the magnitude of the reduction this month, according to spokesman Innocent Mungy.

“We have raised concerns with the significant reduction proposed in March 2013 and the basis by which the reduction has been proposed,” Vodacom Tanzania managing director Rene Meza said. “It is important that interconnect charges are designed to reflect the actual costs of mobile operators and the impact that the reduction will have on investment plans by Vodacom and other national operators.”

Tanzania has 46.8 cellphone subscribers per 100 people, compared with an average of 61.6 in neighbouring Kenya and 100.5 in South Africa, according to data published on the website of the Geneva-based International Telecommunications Union.

Tanzanian subscribers spend an average of 56.7 minutes on domestic calls a month, while Kenyans use 84.4 and South Africans use 137.9.

The regulator said the planned reduction was based on a cost survey it commissioned auditing firm PWC Tanzania to conduct among telecoms firms operating in Tanzania.

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