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Business News of Sunday, 15 March 2015

Source: B&FT

Telcos bare teeth at National Communications Authority

Two of the country's mobile telephony operators -- Vodafone and Tigo, have kicked against plans by the National Communications Authority (NCA) to make them charge a fixed tariff of 4 pesewas for all on net calls.

The fixed tariff will mean that calls made within a particular network will attract a 4 pesewa tariffs – and this, the operators said, will limit their ability to offer competitive services.

Although telcos presently charge varying tariffs for on-net calls, it is not regulated and operators have flexibility in modifying it to create promotional offers like free night calls.

If the fixed tariff regime takes hold, it will mean consumers of special talk packages (bundles) will have extremely limited time to make calls within their home network as part of the special package.

Ken Gomado, Chief Financial Officer of Vodafone, a company that has more than 7 million subscribers, said it has together with Tigo (4 million subscribers), petitioned the regulator to reconsider its intention.

Mr. Gomado told journalists at a media engagement programme yesterday that the two operators are prepared to go the full legal haul even though they want to first exhaust the dispute resolution process at the NCA.

Vodafone’s Gayheart Mensah said the move by the regulator has the potential of killing innovation among telecom providers. Consumers, he said, will no longer enjoy free on-net calls on any network as telcos will have to charge the 4 pesewas per minute.

The move would also have implications for businesses that rely on Closed User Group (CUG) services which enables their employees to make and receive calls at an exceptionally low tariffs. Businesses would have to pay more for communication within CUGs, a cost that could surge by as much as 75 percent.

Vodafone’s Director of Strategy and Wholesale, Julius Owusu-Kyeremanteng, said at a time when the telecoms industry has re-engineered itself through competition, implementing such a move will deny consumers the prospect of choosing from innovative products.

According to Mr. Owusu-Kyeremanteng, on net pricing should be driven by competition and not by regulation.

Obafemi Banigbe, Tigo’s Chief Operating Officer, also said at the engagement forum that the industry will be better served if innovations are allowed to drive the market rather than the heavy hand of the regulator.

Tigo recently launched its “Big Six” campaign which among other things seeks to reward potential subscribers with various promotional offers including free on-net calls and Mr. Banigbe is alarmed that if such plans from the regulator are enforced, its marketing strategies and that of other operators would be dislodged.