Taxes still a barrier to cheap cross-border calls

What you need to know:

  • Initially the project was to be launched on October 1 but ICT Secretary Fred Matiang’i said President Uhuru Kenyatta’s absence from the summit made that impossible.
  • Rwanda and Kenya are the only countries that have revised the taxation structure of the telecommunications industry that will enable telcos to reduce international calling rates.

Failure by regulators in Uganda and South Sudan to scrap taxes on international calls has delayed the full implementation of the One Network Area initiative intended to drive down calling rates in eastern Africa.

Almost a month after the scheduled launch, Rwanda and Kenya are the only countries that have revised the taxation structure of the telecommunications industry that will enable telcos to reduce international calling rates. Safaricom and Airtel have consequently entered into deals with MTN Rwanda to reduce the cost of calls made from both countries.

In an interview with Sunday Nation, Safaricom chief executive Bob Collymore said it was impossible to enter into similar deals with mobile operators in Uganda and South Sudan as their governments still impose high taxes on incoming international calls.

“It is hard. In fact it is impossible for any of the operators in these countries to implement such a deal since they would run into losses. It is not until regulators have implemented their part of the deal that this will become feasible,” said Mr Collymore.

The single network area initiative was mooted by the presidents of Kenya, Uganda, South Sudan and Rwanda in an effort to reduce the cost of doing business in the region, and boost economic integration.

Initially the project was to be launched on October 1 but ICT Secretary Fred Matiang’i said President Uhuru Kenyatta’s absence from the summit made that impossible.  He had travelled to attend a status conference on his case at the ICC in The Hague.  

But Communication Authority of Kenya director-general Francis Wangusi said the launch was not possible because some countries were not ready.

“Existing different policies between One-Network-Area states delayed the launch,” he said.