Telecom Interconnection Cost Estimation Methodology: Tanzania Case Study

by John Andrew Mpapalika (FoC PhD student)

Abstract:
The Telecommunications Reform Act of 1996 of the United States of America (USA) liberalized the telecommunications markets and opened them up to competition. Other countries around the world followed it. This liberalization changed the telecommunications markets with new entrant operators (often mobile) and fixed incumbent telecommunications network operators. The change obliged operators to interconnect their telecommunications networks. Interconnection of networks is essential in the liberalised and competitive telecommunications markets in order to provide seamless communications between subscribers connected to different networks. The interconnectionis charged between operators for using products and services of the other network operator. Currently, interconnection regulations in most developing countries specify for cost based interconnection charges and require the telecommunications network operators to negotiate themselves the cost based interconnection charges on commercial basis. However, the commercial negotiations were subjective; because the incumbent telecommunications network operators having Significant Market Power (SMP) tended to discriminate the negotiations and resulted in forming unfair interconnection charges which were disputed in courts.

This research presents an objective interconnection cost estimation methodology, which can form transparent and fair cost based interconnection charges. The research reviewed existing generic interconnection cost models developed by the British Telecoms Company and Europe Economics. The review identified the analysis of the framework, components, services and design details for the interconnection cost models. This review formed the basis for collecting the required data for the development of fixed and mobile interconnection cost estimation methodologies for Tanzania as a case study. The collected data from Tanzania was analysed and revealed that the interconnection charges set by the regulations were over and above the actual interconnection costs contrary to the regulations. Current insufficient situation in interconnection regulations in Tanzania has been identified by this research, and the need for the effective interconnection cost estimation methodology to improve it has been justified.

Keywords:
Interconnection, incumbent operator, new entrant operator

Short Biography:
In 1983, John Andrew Mpapalika, graduated his B.Sc. in Electronic and Communications Engineering from the London Metropolitan University (then North London Polytechnic). He has achieved a wide range of work experience and professional training in the field of telecommunications engineering, policy and regulations. He worked with the Tanzania Telecommunications Company Limited (TTCL) in his country (Tanzania) for 17 years. In September 1998, he joined the Tanzania Communications Regulatory Authority (TCRA) as the Director of Telecommunications Development. In November 2004, he left Tanzania for London and enrolled as a student on an MPhil/PhD programme in the field of telecommunications engineering with the London Metropolitan University. In May 2011, he got a job with the International Telecommunication Union (ITU) as a Senior Advisor for Southern Africa based in Harare, Zimbabwe.