SMS cost set to go down sharply in East Africa

Cost of sending a text message within East Africa is expected to drastically fall as the regional governments extend the push to lower cost of communication beyond voice.

The reduction in charges are expected to promote cross-border trade and overall economic growth in the region.

Kenya, Uganda, Rwanda and South Sudan have agreed to cut tariffs on SMS across the region. This is part of the ‘One Network Area’ initiative adopted last year to help drive down cost of communication.

The new rates will be launched in October when the regional heads of state meet in Nairobi for the 11th Northern Corridor Integration Project Summit. Uganda’s President Yoweri Museveni, Rwanda’s President Paul Kagame and South Sudan President Salvar Kiir will be hosted by President Uhuru Kenyatta.

Partner states are negotiating for SMS in the region to cost Sh1 across all countries, says Mr Joseph Nyaga, who is in charge of the Northern Corridor Integration Project Authority in Kenya.

However subscribers in Uganda might have to wait longer since phone operators have not implemented the proposal to remove taxes on SMS and data roaming across the three countries. Communications regulator in South Sudan also does not have sufficient constitutional grounding to handle changes in SMS and data.

The two countries will have two months to align their telecom systems to the One Network Area requirements on data and SMS.

Meanwhile, Rwanda and Kenya have concluded consultations with mobile phone operators and are awaiting South Sudan and Uganda to come on board.         

Currently, Kenya’s largest telco Safaricom charges Sh1 to send a text message within the network in Kenya, while international SMS rates remain Sh10. When talks on One Network Area on SMS are finalised, subscribers will pay a shilling to send an SMS to all countries falling within the agreement.

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During the Northern Corridor Infrastructure Summit in Kampala held on June 5, the four partner States agreed that the wholesale price for SMS within the region would be below $0.03 cents inclusive of all applicable charges. In the agreement, they said the retail price would not exceed $0.06 cents per SMS.

The retail rate is the cost incurred in sending SMS within the country while the wholesale rate is the agreed interconnection rate between networks.
Presidents Kenyatta, Museveni, Kagame and Kiir adopted the agreements and have set a deadline for their execution.

Telecommunication firms; MTN, Safaricom, Tigo and Airtel were earlier on against the move saying it would hugely cut down their revenue. At the March 6, Northern Corridor Integration Projects Summit in Kigali, Rwanda, they had proposed huge charges.

In their view, the cost of SMS while roaming for instance in Rwanda and Uganda should cost $0.12 cents in bundles, and $0.22 out of bundle. In Kenya, sending an SMS should cost $0.11 in bundles and $0.20 in Rwanda.

However, the directive by the four heads of State watered down their proposal as the key aim remained lowering the rates drastically for ease of doing business.

Already, through the One Network Area arrangement, telcos from Kenya and Rwanda implemented new cross-border roaming call rates last year.  Uganda chairs the One Network Area initiative and ensures that all parties adhere to the set timelines.

Kenya’s ICT Cabinet Secretary Fred Matiang’i who has been on the frontline in the arrangement, reports to his Ugandan counterpart. It is however ironical that Uganda has been slow in executing the targets under the One Network Area, both in lowering rates for calls, SMS and data.

Safaricom worked with MTN, Airtel and Tigo to cut roaming charges to Sh10 a minute from Sh25. The company is also pursuing targeted agreements with other countries in East Africa such as Tanzania.