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By: Emmanuel M. Garjiek
The recent increase in telecommunications rates has been justified by South Sudan’s Minister of Information, Communications, and Postal Services, who attributes the increase to the depreciating value of the national currency.
The three primary cellular providers in South Sudan, MTN, Digitel, and Zain, announced fee hikes last month to reflect the Central Bank’s reference rate in US dollars.
The three telecom companies announced that in reaction to recent official exchange rate hikes by the Boss, the National Communications Authority and the Bank of South Sudan (BOSS) had decided to modify the communications rates.
Minister Michael Makuei asserted Wednesday at the 8th Governors’ Forum in Juba that South Sudan continues to have the lowest rates in East Africa.
According to Makuei, the country’s telecom providers charge 0.4 cents per minute, and the current economic difficulties, such as a depreciated currency, are to blame for the increase in prices.
The region’s lowest tariffs are found in South Sudan. Each minute, we charge 0.4 cents. Prior to the depreciation of our currency, we were not affected. However, Makuei stated that the exchange rate began to impact tariffs as the currency declined.
Makuei, who also serves as the government spokesperson, explained that the country’s economic crisis is the primary reason for the higher expenses, adding that the increase in tariffs is not the result of a formal price increase but rather of the impact of the exchange rate on service costs.
“What has caused these issues is not an increase in fees, but rather the depreciation of our currency. Although international standards mandate that operators bill in hard cash, they do so in South Sudanese pounds. “The tariffs increase when converted to local currency,” Makuei said.
Additionally, he brought attention to the difficulties telecom firms confront, especially in rural areas. Because they are suffering greater losses in rural areas, operators are even threatening to shut down towers. Some businesses are thinking about restricting their offerings to cities, Makuei stated. “The inability to obtain foreign currency at the Central Bank’s official rates has caused them to express concerns.”
The Central Bank of South Sudan has been unable to supply enough foreign cash at official rates, Makuei added, causing businesses to turn to the illicit market. “The Central Bank indicated to us that they were unable to distribute foreign money to operators at the official exchange rates. He stated, “They had to agree with operators on terms based on the bank rate, not the black market rate.”
The national minister emphasized that as long as the currency is weak, businesses will keep raising their tariffs. According to the present currency rate, he said, “We have two options: either we tell the companies to shut down, or we let them operate.” He went on to say that tariff rates will inevitably drop if the currency appreciates.
In reaction to public outcry, Makuei recommended that people either cut back on their phone use or put up with the circumstance. “Rates will automatically decrease if the currency strengthens. In the meanwhile, we must acknowledge the situation as it is,” he stated.
