Interconnection

What it is

Generally, interconnection refers to the technical and commercial framework that enables customers of one operator to communicate with customers of another operator. Interconnection could be domestic linking two or more national operators or international linking local network customers with customers of other operators in other countries.

In terms of logical flow; interconnection may take the following forms;

  • One to one linkage – two operators directly interconnect to connect their customers
  • Transit arrangement – One operator connects to customers of another operator via another operator(s)

In addition, the transfer of communication services may be one way (common in the international termination market) or two-way with bi – directional transfer of communications.

Traditionally, interconnection has been associated with voice and data communications but the same commercial principles hold true for services like mobile payment platforms & wallets, courier services, DTT services as well as other sectors like banking, energy, water and transport.

Why the regulatory concern

Sections 4 (s), 4(t) and 62 of the Communications Act together with Fair Competition Regulation  and Interconnection Regulations 2005 broadly mandate the UCC to regulate interconnection with a view of promoting fair competition and long term consumer well-being.

This mandate is premised on the fact that by definition all network operators have absolute monopoly in the termination of calls to their customers.

Current regulatory framework

While technical interconnection principles are fairly global, different countries establish specific interconnection frameworks in recognition of their local circumstances. In light of the open technology and service neutral licensing regime the interconnection is premised on the principle of commercial negotiation with the Commission only enforcing reference domestic interconnection rates for imposition in the event that;

  • Two parties fail to agree on negotiated interconnection rates – see section 62 (4)
  •  An imposition promotes fair competition

Reference rate determination

The Commission has determined domestic reference interconnection rates on three occasions;
  • COSITU determined rate imposition upon Celtel Uganda Ltd and Uganda Telecom, 2004
  • LRIC reference rate determination of 2009
  • LRIC reference rate determination of 2012