As stiff competition forces telecom operators in Africa to lower call rates, a decline in quality of service has caused regulators to threaten penalties.

Poor service provision by mobile operators is generally considered to be a result of lack of investment in network upgrades and has become a source of concern in many African countries where customers are losing money on uncompleted calls.

Over the past nine months, mobile operators in the region have been engaged in a price war that has resulted in cheaper communication services. But the sudden call-rate reductions have produced nothing but congested and unreliable networks as customers can now afford to speak longer for less.

Last week, the Nigerian Communication Commission (NCC), the country's telecom sector regulator, warned operators in the country of stiff penalties in a bid to force them to improve their services.

Even bigger operators in the region, including MTN and Bharti Airtel, have been cited. The Quality Assurance Test (QAT) recently carried out by the NCC showed that all operators failed to meet service quality levels.

NCC Director of Technical Standards and Network Integrity Balarabe Sani said last week that "the monthly data capture and analysis shows that the network congestion has continued to increase."

In Nigeria, calls dropped by operators are supposed to be below 0.1 percent but the figure was last measured at about 2.5 percent, suggesting the situation is worsening. As a result, the NCC has banned all promotions aimed at maintaining or attracting new customers except where adequate capacity is provided by the networks.

In Uganda, meanwhile, poor services have continued and the regulator is warning the service providers will be punished if the situation is not improved.

About two months ago, Rwandatel's license was revoked by the regulator as a result of continued poor services and lack of compliance. Rwanda is the first country in East and Southern Africa to revoke an operator's license due to non-compliance despite several reminders by the regulator. A report by the Uganda Communication Commission (UCC) has shown that none of the five operators in the country, including MTN, Bharti Airtel and Warid Telecom, meets the set maximum limit of 2 percent for both blocked and dropped calls.

A call is termed blocked when an attempt to reach a person being called is not successful due to network failure. On the other hand, a dropped call is one that is terminated by a network before it is ended by either party participating in the call.

"The Zambian government has refused to license a fourth operator until 2015 in order to slow down competition by operators and allow them to improve and expand their networks," said Amos Kalunga, a telecom analyst from the Computer Society of Zambia.

Kalunga said awarding licenses to several operators results in stiffer competition, which may bring down the cost of services, but tends to significantly slow down investments in the networks for better services.

Although the Zambian, Kenyan and South African governments have formulated harsher laws against erring operators, no single operator has so far been punished for poor services.

Through its regulator, the Independent Communication Authority of South Africa (Icasa), the South African government in 2009 issued what it called the End-User and Subscriber Service Charter, which directs operators to ensure, among other things, that their networks are available to complete 95 percent of calls over a period of six months. The charter also stipulates a US$65,000 penalty fee for a poor record. However, Icasa has to date not punished any erring operator despite numerous complaints by customers of poor services.

The Zambian government through the Zambia Information and Communication Technology Authority (ZICTA), the country's telecom sector regulator, also formulated a law last year that gives ZICTA exclusive powers to punish erring service providers. As in South Africa, Zambian service providers have been failing to meet the 95 percent call-rate-completion service level set by the regulator. The penalty that can be charged to mobile service providers for offering poor services to consumers in Zambia is US$250 per affected user.

In addition to heavy penalties, Zambian law requires compensation from service providers to customers.

The Communication Commission of Kenya (CCK) also has a law that allows the regulator to impose a fine of 500,000 Kenyan Shillings (about $6,000) on any operator that fails to meet the quality-of-service standards set by the authority.

As in South Africa, no operator has so far been punished in Zambia and Kenya for poor services despite numerous complaints by customers for poor services.