South Africa was the first to reduce interconnection charges after the Independent Communication Authority of South Africa (Icasa) issued regulations regarding interconnection fees, followed by Uganda, which introduced fixed interconnection charges in December last year.

Last week, the Nigerian Communications Commission (NCC), the country's telecom sector regulator, issued a new set of interconnection rates for the communication industry.

African countries fear that unregulated interconnection fees stifle competition, kill innovation, hold back telecom penetration and prevent additional investment in the sector, while customers get exploited in the process. A fixed interconnection rate is, however, an international practice that many African markets are yet to adapt.

High termination prices -- the fees operators charge each to allow inter-network calls -- tend to favor the bigger players, while regulated interconnection fees allow smaller companies to compete based on quality of service.

The move by Nigeria, South Africa and Uganda to reduce interconnection rates is likely to have ripple effects in Africa as the three countries are leaders in the African telecom market.