UCC directive restricts promotional tariffs

14 Jun 2011

The Uganda Communication Commission (UCC) has released new retail tariff guidelines in an effort to fight ‘anti-competitive pricing practices’. The directive prevents companies from charging on-net rates of less than 70% of the current UGX131 (USD0.05) per minute interconnection rate, giving a UGX92 a minute floor price. The directive also limits promotional tariffs to 90 consecutive days, with at least 90 days between each promotion. Fierce competition between Uganda’s cellcos has driven down call rates, but according to the UCC, the ‘price war’ has led to an overall loss of value to customers who are struggling to keep track of tariff rates and promotions, due to their variety and frequency of change. The new regulations are aimed at increasing stability in the market and attracting investors, although they are expected to cause an increase in call rates.

According to TeleGeography’s GlobalComms Database, wireless population penetration in Uganda is only 42% compared to Kenya’s 58.6% and Tanzania’s 48%. Quarterly growth in the wireless market ending in March 2011 slowed to 3.8%, down from 12.9% in the quarter ending March 2009.