CCK rejects MTR allegations

GOVERNMENT

Kenya’s regulator has rejected allegations that business and political interests have impacted a decision on mobile termination rates.

The Communications Commission of Kenya’s Director General, Francis Wangusi, said in a statement: “Commentaries in some sections of the media appearing to suggest that the CCK Board has been unable to make a decision on the way forward on the implementation of the glide path on the Mobile Termination Rates (MTRs). The said reports further suggest that the CCK is hostage and beholden to certain political and business interests, thus casting aspersions on the ability of the Commission to effectively regulate the fast-growing ICT sector.  The reports have elicited disquiet in the local ICT market, and therefore merit a response.”

Wangusi gave the assurance that a decision on the MTRs would be made soon, and that it would be “fair and in the wider interest of consumers and the mobile telecoms industry.”
He said the Commission was only awaiting the completion of a study on the impact of the glide path on the competition in the sector and the wider economy.

CCK began regulating interconnection fees in 1999 following the entry of two additional mobile operators in the market. In March 2010 CCK undertook a detailed review of the Network Cost Study, aiming to develop a new interconnection framework that promotes competition, operational efficiency of the firms and further growth of the sector through continued investments and innovations. Subsequently, CCK issued the Determination No.2 on Interconnection Rates for Fixed and Mobile Telecommunications Networks; Infrastructure Sharing and Co-location; and Broadband Interconnection Services on 16th August 2010. The Determination was to be effective from 1st July 2010 to 30th June 2013.

The issuance of the Determination in August 2010 saw retail price competition in the mobile voice services intensify with actual off-net prices fall from a high of Ksh12 per minute to between Ksh5 and Ksh3 per minute. On-net prices also fell from Ksh8 to Ksh3 per minute.

Despite these positive signals in the market, some sections of the mobile telecoms industry and some government agencies raised concerns that the ensuing retail price competition arising from the reduction in mobile termination (wholesale) prices was detrimental to the continued growth of the sector and the economy.

In a meeting held on 20th May 2011, the CCK Board considered these issues and decided to freeze the mobile and fixed termination rate for year 2010/2011 for a further one year as the Commission evaluated the veracity of the issues raised by stakeholders. Consequently, on June 8th last year, the Commission issued Addendum No.2 to the Determination No.2 of 2010 revising the mobile and fixed termination rates and the attendant glide path.

CCK said: “To further address the issues raised, the Commission has since contracted the services of a consultant to undertake a study on the impact of the ensuing competition in the retail mobile voice market. The consultant has submitted an inception report and is due to present the interim report to the CCK Management and Board soon.”