Uganda calls time out on mobile-phone price wars

A precedent in the competitive, fast-growing African telecommunications sector could soon be set if the Ugandan Communications Commission (UCC) moves ahead with guidelines for minimum phone call tariffs.

Uganda's rapidly growing telecom sector was hit by a raging price war starting last year. Competition among operators for new phone subscribers is digging into profit margins and reports have indicated this will also affect government taxes.

If the regulatory move goes through, the UCC will be stepping into unchartered waters, as it could be the first regulator in the East African region and the entire continent to regulate a sector that is today characterized by low tariffs.

The UCC has issued a notice seeking public opinion on the regulation of telecom call rates. The move is in response to an ongoing price war in the telecom sector, sparked off by Warid Telecom when it introduced near-free calls last year.

According to the UCC, the new guidelines, expected to come into effect at the end of the month, are aimed at curbing anticompetitive tendencies, encouraging new investments, enhancing tariff transparency and protecting consumers.

"By the end of this month we hope to come out with a position on the call tariffs," Isaac Kalembe, a public relations officer with the UCC, said. "Consultations are still going on with the operators and then we will invite users to a stakeholders' meeting."