Christoph Stork and Alison Gillwald have been engaged with the real-world problem of high mobile termination rates in Southern Africa for several years. Perhaps the earliest intervention was with the Namibian Communication Commission in 2009. Then there were repeated engagements in South Africa. We know, from our experience, that policy engagement does not leave a lot of time for academic publication. But it’s not that our colleagues did not try to publish in academic journals.
The very first airing of LIRNEasia‘s current research on customer relationship management in electricity and telecom sectors was in July 2013 at an event organized by Informa. But that was a partial presentation, since the design team had not finished their work by then. The first full airing was therefore in Windhoek, Namibia, a rather unusual location, but we were invited; we offered to discuss our current research; they said yes. We emphasized the telecom angle since that was year-end event organized by the Namibia regulator to announce its workplan and consult stakeholders. Later this month, we will be making a similar presentation, but this time highlighting the electricity side, to S Asian regulators meeting in Colombo.
Our sister organization Research ICT Africa has issued an interesting document called mythbuster on the contentious issues of high mobile termination charges and their contribution to giving South Africa mobile prices that are three times those of neighboring Namibia. More strength to your arm RIA. Mythbuster is a great idea. We should see if we can do one soon.
The quote below comes from one of many media reports that carried the results of RIA benchmarking of mobile prices across Africa. SA’s prepaid cellphone pricing is three times more expensive than Namibia’s, making SA among the most expensive countries in Africa despite an intervention to regulate the tariffs, according to a study released this week by Research ICT Africa. The research found that among 46 African countries studied, SA ranks 30th in affordability of prepaid mobile telephony. This places SA behind countries whose regulators have enabled competition by enforcing cost-based mobile termination rates. Kenya, Mauritius, Egypt and Namibia were found to be the most affordable.
Namibia poses an interesting question. The regulator acts to reduce one of the key costs of providing offnet calls, the mobile termination rate. But the operator holding 85 percent market share refuses to make a corresponding reduction in offnet call charges. Now the regulator has responded by ordering reduction of offnet call charges. Namibia has led SA in cutting call termination rates — the fees the operators charge one another to carry calls between their networks.
Namibian Communications Commission (NCC) has ordered the convergence of interconnection rates between operators (Cell One, Telecom Namibia and MTC) through the introduction of a standard charges structure; rates will be reduced bi-annually over a two-year period. Symmetry between mobile and fixed termination rates supports fixed-mobile convergence and removes distortions caused by previously higher mobile-to-mobile rates. A benchmarking study conducted by Research ICT Africa, LIRNEasia’s sister organization, on behalf of the NCC indicates that the cost of termination of an efficient operator in Namibia is NAD 0.24 (USD 0.03).