MTN Rwandacell Plc registered a profit after tax loss of Rwf10.9 billion in the quarter ended September 30, attributed to, among other factors, the impact of the zero mobile termination rate (MTR).

The MTR is the fee one network operator charges another for connecting a call to a user on its network and plays a critical role in ensuring the smooth operation of mobile networks.

According to Dunstan Stober, MTN Rwanda’s acting Chief Financial Officer, the zero rated MTR, enforced by the Rwanda Utilities Regulatory Authority (RURA) in August last year, has cost the company billions in revenues.

"When we look at our performance and the traffic that we've exchanged, if I assume the MTR was there, we would have had about Rwf17 billion in revenues, but we have lost this," Stober told The New Times.

ALSO READ: MTN Rwanda posts Rwf11 billion loss in quarter 3

Stober added that the company is seeing the impact of the MTR spin-off effect on the one network area (ONA) traffic from permanent roamers in Uganda and South Sudan region, who choose to permanently use their MTN Rwanda sim cards.

RURA introduced the zero rated MTR as a temporary directive meant to level the playing field and ensure fair competition in the market. The directive dictated that telecommunication companies would not be paid for calls received on their network from other networks in Rwanda for a period of one year.

MTN has consistently argued that this directive is impacting its voice revenue and driving a rise in interconnect cost of sales.

Stober said that MTN has been engaging with the regulator to find a solution.

"The regulator commissioned a study to determine the applicable MTR which will be determined before the end of the year. The preliminary findings, which were presented to us, recommend the reinstating of the MTR," he said.

Apart from MTRs, the telecom said that the subsidised entry-level smartphones that they introduced to boost internet penetration in Rwanda also impacted their financials.

"We sold 100,000 smartphones at a subsidised price of Rwf 20,000, while we bought them at Rwf 60,000. So, we carried almost Rwf 4 billion of subsidy in our financials for this year and that impacted our profit after tax," he noted.

Stober also noted that there has been no significant shift in MTN's share price at the Rwanda Stock Exchange (RSE) since the release of the first half of the year results, indicating that the market still has confidence in the brand.

MTN Rwanda's share price at the RSE is currently at RWF 170.