Mobile phone operator MTN Uganda raised tariffs by up to 100 percent due to rising costs, the company announced on Thursday citing inflationary pressures for east Africa's third largest economy.

MTN, the largest operator in the country with 7.5 million of the country's estimated 13 million mobile phone subscribers, had said last week revenue this year might be hurt by inflation.

The annual inflation rate rose to 21.4 percent in August from 18.8 percent in July, on the back of higher food prices and imported inflation through a weaker currency.

MTN has increased the rate it charges customers for calls to another network by a third to 4 shillings a second while those for calls across its own network will double to 4 shillings. The changes take effect this weekend.

"In light of recent economic changes, however, the tariff structure is not sustainable for increased business roll-out. The industry is at risk of self-destruction to the detriment of consumers and other stakeholders," Chief Executive Themba Khumalo said in a statement.

"At the current rate investments in the sector will decline with the associated quality deterioration. We have a responsibility to protect Uganda's telecommunications sector and ultimately the customers."

Communication and transport prices combined account for 12.8 percent of Uganda's Consumer Price Index.

MTN is investing $100 million this year to upgrade its network, it said in the statement. Other operators in the market include Warid and India's Bharti Airtel.

To contact the editor, e-mail: