Boost in International Net Outpayments and Incoming Traffic to Africa

With international traffic exchange based on termination charges under a liberalised environment, many operators generate greater termination revenues than they did in the past when this exchange was based on accounting rates between countries’ monopoly telephone companies. Net outpayments from operators, based in the United States, to African counterparts, for example, are frequently greater today than they were under the accounting rate system. In total, operators in African countries received payments of around USD100 million greater in 2006, than they did in 1996, and more than USD200 million greater than 1994. In fact, the total net outpayments from the United States to Africa were the highest ever recorded in 2006, the latest year for which data are available (see Figure 17).

One reason for this increase, in aggregate revenue at the national level, is that although interconnection between networks has become more cost-oriented, the volume of international traffic has increased enormously over recent years. Between 2000 and 2006 outgoing traffic from the United States to Africa increased by 344 per cent (see Figure 18). Traffic in the opposite direction increased 80 per cent. The primary reason for this increase is that accounting rates kept the prices for international telephony artificially high to the point of being prohibitive for many users to make calls. It is also the case that network expansion, as a result of liberalisation, has created many more calling opportunities. As such the increase in traffic volume is the result of lower prices for international calls and network expansion.

Source: Sam Paltridge, Principal Administrator, Directorate for Science, Technology and Industry, OECD.