Kenya’s mobile termination rate debate hots up

Kenya’s mobile termination rate debate hots up

The Consumers Federation of Kenya (Cofek) and two of the country’s operators, Airtel Kenya and Telkom Kenya, have joined in the controversy over a case involving mobile termination rates (MTR) – the charges levied by a mobile service provider on other telecommunications service providers for terminating calls in its network.

Business Daily reports that the country’s leading operator, Safaricom, has petitioned the Communications and Multimedia Appeals Tribunal to block the decision by the regulator, the Communications Authority of Kenya (CA), to cut mobile termination rates to Sh0.12 per minute from the current Sh0.99 per minute (one shilling is just under one US cent at present rates). The current rate has been in place since 2015.

Safaricom argues that the CA’s model uses a benchmarking methodology as opposed to long-run incremental costing, which, it suggests, is the preferred model in determining MTR.

Airtel and Telkom have been criticising Safaricom for allegedly only being interested in protecting its revenues. Indeed, Safaricom argues that the move to cut the charges will adversely affect its revenues. Safaricom, with a dominant position in the voice market, does well out of a higher MTR. The smaller operators, by contrast, favour the cut as their users are likely to spend more time on other networks than their own.

The CA’s view, with which consumer group Cofek presumably agrees, is that the cut will have a positive impact on both consumers and operators and that, if charges across networks come down, there will be less need for consumers to own multiple SIM cards.

However, the cuts – expected to be implemented from the start of this year – will now have to wait until the appeal is heard and determined. It will next be brought before the Communications and Multimedia Appeals Tribunal on 2 February.

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