Uganda Telecom to appeal interconnect ruling over Gemtel

07.05.2011

In July last year, UCC fixed interconnection rates in a landmark move that leveled the playing field, but this court case is a legacy of the period before the charges were fixed.

A fixed interconnection rate is international practice, but until July last year, the Ugandan market was yet to adopt it. Every one of the five players in the Uganda market charged the other a high interconnection rate to maximize profit.

In the region, interconnection is a thorny issue. In Kenya, Safaricom and Orange Kenya have recently failed in a bid to overturn an order to reduce mobile interconnection charges.

The Kenyan regulator has been studying an appeal from the two companies since February, asking for a rethink on a reduction from 2.21 shillings (a little less than $0.03) per minute to 1.44 shillings by July, further declining to 1.25 shillings by July 2012.

Both companies argued that any reduction would endanger jobs and harm their ability to invest in new cellular infrastructure.