The Communications Regulatory Authority of Namibia (CRAN) has slashed mobile and fixed termination rates by 50% to reduce operational costs for telecommunication operators in the country.
However, the move which comes into effect on 01 October 2022, will not immediately see consumers making cheaper calls.
“For now, consumers will not directly benefit from this reduction in terms of paying less for voice calls but may indirectly benefit from increased competition in the industry which will increase the variety of services and products. CRAN is, however, investigating other possibilities to reduce voice call rates, to give consumers relief over the medium term and a decision will be communicated in due course.” CRAN CEO, Emilia Nghikembua said in a Friday announcement.
Termination rates are interconnection payments/charges made between operators to compensate one another for traffic exchanged between their networks.
She said the decision by the sector regulator is being supported by a study conducted in 2021 to determine the impact of lowering termination rates in the telecoms industry.
“This decision is important as one of the largest cost components for operators, providing voice services is that of interconnection, and this reduction shall therefore enable more competition in the sector. Therefore, reducing the termination rate will assist “other operator” to reduce their operational costs and compete more effectively,” Nghikembua said.
Mobile Telecommunications Limited (MTC) when contacted by The Brief said it had agreed to the planned termination cuts.
“We agreed to the reduction of the termination rates in the greater interest of the industry and our customers,” MTC’s Chief Human Capital, Corporate Affairs, and Marketing Officer Tim Ekandjo said.
According to CRAN, of the 2.9 million subscribers in Namibia, 90% are MTC subscriber’s and the other 10% is made-up jointly of subscribers from Telecom Namibia, Paratus Telecommunications (Pty) Ltd and MTN Business Namibia (Pty).
This means other operators are paying more to MTC for calls made to its network, in comparison to calls made from MTC to other networks because its network carries most of the outgoing traffic calls and SMS volumes.
The reduced mobile termination rates will be N$ 0.05c/minute, reduced from N$ 0.10c/min) and the fixed termination rate will be N$ 0.05c/minute reduced from N$ 0.10c/minute, while the SMS remains at N$ 0.01c per SMS.
