For a number of years in the past, cross-border phone communications have been attracting a host of roaming charges. The justification for this is that if for example you are calling someone in Kenya from your Vodacom network, your network will rely on a partner network in Kenya to connect the call and the two networks charge each other for usage. These costs are ultimately passed to the customer.
Roaming charges are part of the EAC integration agenda. One of the EAC’s key objectives is to promote the free movement of people within the region. Businesspeople operating across borders need constant communication with clients, suppliers, and partners. Expensive roaming services increase the cost of doing business. Affordable roaming enhances regional trade and encourages greater economic integration. “The removal of roaming charges is a milestone in building a true internal market”, said Albin Bagbin, Speaker of Ghana’s parliament when addressing the ECOWAS parliament on reduction of roaming charges.
In recognising this problem, EAC launched the Zero-roaming digital space initiative in 2014 under what became to be known as the One Network Area (ONA). The champions were Kenya, Rwanda and Uganda. The ONA initiative has made some progress where in some cases over 60%-90% reduction in roaming charges have been recorded amongst the initial three members.
Other partner states have joined with varying degree of roaming integration. In principle, for these countries, it is not whether roaming charges should be reduced rather than how to implement a sustainable, region-wide framework without harming operators and government revenues.
Tanzania, for example, has traditionally been viewed as the most cautious participant in the ONA process. Reasons include concern about loss of telecom and tax revenue, desire to protect investments made by domestic telecom companies etc. That said, Tanzania has recently become more engaged. TCRA has recently reported significant reductions under the roaming framework and Tanzania has been actively participating in new EAC roaming negotiations.
Burundi and South Sudan have are lagging behind not because of opposition to the idea, but because of a smaller telecom market size, infrastructure limitations and regulatory implementation challenges. DRC and Somalia are new entrants are still aligning regulatory frameworks.
Let me comments about the fear of revenue loss to telecom companies and reduction of the government’s tax base. If Tanzania, for example, fully adopts the ONA, the financial gains would not come mainly from government revenue increases, but from economy-wide efficiency gains, business expansion, and reduced communication costs. Cross-border call and sms costs would drop by 60%-90%. This would enable Tanzania businesses operation regionally (transport, trade, logistics, banking) to save million of dollars annually in communication costs. This is private-sector gain, but it translates into higher taxable base and GDP growth.
Reducing roaming charges is more than a telecommunications issue; it is an important integration confidence building measure. Just as the EAC seeks to remove barriers to the movement of goods, services, capital and people, lowering roaming charges removes barriers to communication.
