A Critical Analysis on Factors Contributing to Regular Tariff Adjustment
Introduction
In the East African region, telecommunication tariffs vary significantly across the member countries, and the influence is twofold: infrastructure development and economic conditions.
Comparing South Sudan’s telecommunications costs with those of its neighbours reveals underlying reasons for the high tariffs facing its citizens. East African region state of Tariffs charges
In Kenya, a robust fibre optic infrastructure supports low tariffs: approximately $0.03 for both on-net and off-net calls, $0.10 under the One Network Area (ONA) scheme, and $0.084 per MB of data. The government drives this development through the ICT Authority of Kenya, which also provides transit fibre lines to landlocked nations like Uganda and South Sudan. Uganda charges $0.064 (on-net/off-net), $0.10 (ONA), and $0.11 per MB of data facilitated by
an extensive network of fibre optic networks deployed and managed by the National Information Technology Authority (NITA).
Rwanda benefits from 100% fibre optic coverage, with tariffs at $0.0365 (on-net/off-net), $0.10
(ONA), and $0.67 per MB. The government prioritizes ICT development through the Rwanda Utility Regulatory Authority (RURA), making Rwanda a truly digital economy in the region today.
Tanzania, with its extensive coastline and numerous fibre marine cables landing from Europe and Asia, sets tariffs at $0.014 (on-net/off-net), $0.10 (ONA), and $0.34 per MB of data, providing connections to inland countries like DRC, Rwanda, and Uganda.
Sudan charges $0.035 (on-net), $0.043 (off-net), and $0.3 per MB of data. This is supported by fibre optic infrastructure developed by its national telecom provider, Sudani, which extended connections to landlocked countries like Chad and Ethiopia.
In contrast, South Sudan’s telecommunications infrastructure could be much better. With only a 200 km privately owned fibre optic link from Nimule to Juba and no governmental effort to expand this network to states, the country attempts to align its tariffs with its East African neighbours, setting them in 2016 at $0.04 (on-net/off-net), $0.10 (ONA), and $0.08 per MB of data. These are per minute charges at local value of SSP. The factors that contributed to
telecommunication tariffs in South Sudan should be analyzed.
Hyperinflation: South Sudan is experiencing acute hyperinflation, which led to the rapid depreciation of South Sudanese Pounds (SSP) against the United States dollar, directly impacting tariff costs. This always forces network operators to have no other alternative apart from adjusting the value of $0.04.
Exchange Rate Disparity: Telecommunications companies operate at an exchange rate controlled by the regulator (NCA), which is a rate of 1,355 SSP to 1 dollar, translating to 54 SSP per minute for calls. However, telecommunication companies could not access forex in the central bank at that rate, leading to the loss of revenue and an inability to sustain their
network operations across the country. The central bank reference rate is approximately 2,950 SSP to 1 dollar, which results in actual costs of 118 SSP/minute. Thus, it becomes necessary to alter tariffs to 100% even. Despite this, the bank may not achieve it all at once but would do it in shifts instead.
Government regulation: Telecommunications companies need to use the Forex margin adjustments that will be made via the BOSS reference rate to bridge the exchange rate differential with a steady and gradual approach. It is a must for telcos if it is done most quickly by December 2024, but most significantly, it will allow lower telecommunications costs to be paid in line with BOSS standards.
Business viability: Suppose the proposed tariff exchange rate adjustment is not implemented.
In that case, telecom companies will struggle to sustain themselves, and the most affected populace will be those in rural areas where low tariffs are unfeasible because they can’t access foreign exchange support from the banks.
Insufficient infrastructure investment: The government has not bought fibre optic networks
that are important for communication. Therefore, the connection speed is slow, and people stick to old technologies, which are not necessarily the best way out of this situation. Using these old technologies over the new ones results in connectivity degradation.
Recommendations
For every South Sudanese to achieve affordable connectivity,
1. The government ought to make infrastructure development a top priority and invest in
Fibre Optic.
2. Stabilize forex supply chains to guarantee telecommunication companies have access
to foreign exchange rates to help them deliver efficient and reliable services to citizens.
3. The government should access other reliable alternative internet options, such as broadband, which internet users cannot access due to restrictions.
Conclusion
As the public, we should not necessarily blame telecom experts like Napoleon Adok Gai,
Director General NCA; instead, we should urge our government to prioritize infrastructure
investment. When these initiatives are implemented, the network’s cost will instantly reduce,
tariffs will no longer be increased regularly, and South Sudan Telecom’s status will be elevated
like that of our East African counterparts.
Kuol M. Maluat is Concerned South Sudanese citizen living in Juba.
