Kenyans to enjoy cheaper calls as regulator cuts key rates

Communications Authority of Kenya (CAK) Director General Ezra Chiloba. The regulator lowered the rates mobile operators charge each other to allow customers communicate across their networks.

The cost of cross-network calls is set to fall substantially from next month after the regulator lowered the fees that mobile phone operators charge each other for interconnecting by about 87 percent.

The Communications Authority (CA) yesterday December 22 set the mobile termination rate (MTR) and fixed termination rates (FTR) at a uniform Sh0.12 from January 1, 2022.

MTR and FTR are the rates mobile operators charge each other to allow customers communicate across their networks.

Currently, all telcos in Kenya have a fixed rate of Sh0.99 for both FTR and MTR.

“The revised interconnection is projected to have a positive outcome for both consumers and operators. At the retail level, consumers will now enjoy access to a variety of services across networks and at wholesale level, operators will have more price flexibility when developing innovative and affordable products” CA Director-General Ezra Chiloba said.

The review comes as a major victory for Airtel which had in October petitioned the regulator to review the fees, which it claimed had continued to favour rival Safaricom since 2015 when it was set.

Industry data shows that the rate has been falling gradually from a high of Sh4.42 in 2011 to Sh0.99 in 2015 before a freeze of more than five years.

A previous cut in the rate in 2010 from Sh4.42 to Sh2.21 sparked a price war between Kenyan telecoms operators.

Analysts reckon that Airtel and Telkom Kenya will be the main beneficiaries from a review of the mobile termination rate, along with consumers.

Revenues for the larger operator, Safaricom, would likely fall but the impact would be more limited for its earnings due to its high subscriber numbers.

European countries, including France, the United Kingdom, and Germany, have in recent years reviewed their MTRs downwards, leading to an increase in subscriber numbers due to low calling tariffs.

In July, the CA said time was ripe for Kenya to review the MTR to match shifts in technology that have made mobile telephony more efficient.

The CAK has in the past defended Safaricom against claims that the telco had abused its dominance in the telecommunications sector.

Then CAK Director-general Wang’ombe Kariuki in April told the Senate ICT committee that compliance checks on Safaricom’s M-Pesa, voice, and text services did not reveal contracts and practices that have exposed its rivals Airtel and Telkom to unfair competition.

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