Kenya delays lower termination rates

GOVERNMENT

|
Image: By BiztechAfrica
Kenya delays lower termination rates

By Semaj Itosno, Nairobi, Kenya

Kenya’s mobile subscribers will have to wait a little longer before enjoying reduced calling rates.

The reduction in the rate mobile phone operators pay each other for calls originating from rival networks has been delayed on failure by the board of Communication Commission of Kenya (CCK) to approve the new charges as expected.

This is despite the mobile phone operators, CCK  and Kenya’s Ministry of Information having agreed in May to cut the Mobile Termination Rate  (MTR) rate to Sh1.60 (USD 0.02) a minute on Sunday from the current Ksh2.20 (USD 0.03) — in what was to end the one-year freeze and reduce the cost burden on smaller operators.

This means Kenya remains at par with Uganda but Tanzania still charges higher.

Uganda charges a termination rate equivalent to Kenya’s Ksh4.50 (USD 0.05) a minute while Tanzania’s rates are at Ksh5.75. (USD 0.07)

Essar said the delay would hurt the smaller operators. “yuMobile is disappointed by the delayed implementation of the reduced MTR,” said Madhur Taneja, Essar’s country manager.

Safaricom has been the only operator that has benefited for the current termination rate. The CCK said that Safaricom earned Sh868.9 million from the rate in the three months to December while its main rival Airtel paid out Ksh544.2 million (USD 6.56million), Essar Ksh192.5 million (USD 2.32million) and Telkom Kenya Ksh21.3 million (USD 0.26million).

Safaricom remains dominant with 67.7% of Kenya’s mobile phone subscribers. Airtel has 15.7%, Orange 10.4% while Yu trails with 6.2%. 

Safaricom, which has been against low termination rates, said there was no alarm.  “There is no emergency as far as we (Safaricom) are concerned, the CCK Board will consider the matter in due course together with representations made by all stakeholders and advise the industry accordingly,” Nzioka Waita, director corporate affairs at Safaricom.  “We would expect any decision made by the CCK to be backdated to July 1, 2012.”

“It is inevitable that the delayed implementation will only benefit the dominant player and will lead to reduced revenues for other players as they continue to pay the higher rates. This is a big blow to the industry and the younger players like yuMobile who have pushed for a level playing field.”

 Francis Wangusi, the acting director general of CCK, said the new rates have been delayed after the regulator failed to approve them last week.

Wangusiu said he board did not divulge reasons for the delay.

The MTR of Sh1.60 (USD 0.02)  was arrived at as a compromise fee given that Safaricom was calling for a high fee while the CCK and the other three operators—Airtel, Telkom Kenya and Essar’s Yu—were keen on Sh1.44. (USD 0.017)

The rate fell from Ksh4.42 (USD  0.053) in June 2009 to Ksh2.21 (0.027) in July 2010 and was to drop to Sh1.44 last June before President Mwai Kibaki froze it for one year following intense lobbying from Safaricom and Orange.

The downward review in 2010 gave the operators room to cut their tariffs by more than half, but the telecommunication firms have ruled out lower call rates following the reviewed termination rates and will instead absorb the cost savings.  



Share the News

Get Daily Newsletter

comments powered by Disqus

MORE GOVERNMENT NEWS

CEO of BOCRA to open SAPOA AGM

Thari Pheko, The Botswana Communications and Regulatory Authority (BOCRA) Chief Executive Officer will be the guest of honour at the 14th southern Africa Postal Operators Association annual general meeting. Read More

Prof Quaynor calls for greater partnerships within Ghana’s ICT sector

The Board Chairman of Ghana’s National Information Technology Agency (NITA) Professor Nii Narku Quaynor, has called for a much greater collaboration and partnership within the country’s Information and Communication Technology sector. Read More

August is Science, Technology and Innovation Month

Botswana’s Minister of Infrastructure, Science and Technology (MIST), Hon. Nonofo Molefhi will officially launch the Science, Technology and Innovation (STI) month on Tuesday.   Read More

US President hails Kenya for leading innovation in the region

The US government has hailed Kenya for setting good example on how technology can change way of doing business.  Read More

Ghana’s Vice President opens MOBEX15 in Accra

The Vice President of the Republic of Ghana, Kwesi Bekoe Amissah-Arthur, has officially opened the first Africa Mobile and ICT Expo dubbed #MOBEX15 in Accra.  Read More

Experts seek e-governance to check graft

ICT experts have urged the adoption of electronic or e-government at all levels to prevent the stealing of public funds. Read More

Khama points to ICT for drop in tourist numbers

Botswana’s Minister of Environment and Tourism, Tshekedi Khama, said the tourist numbers into the country continue to plummet largely because of poor ICT development in that sector as well as unreliable air service.  Read More

Botswana Ministry introduces e-nnovation

Botswana’s Ministry of Youth, Sport and Culture (MYSC) is developing ways of getting the local youth to chart the technology waters by coming up with programmes that allow the them to be innovative for the benefit of the nation.    Read More

Ghana to build largest data centre in West Africa

The Ghana government, through the Ministry of Communications, is currently constructing what it believes will be the largest data centre within the West African sub region.  Read More

‘Why NCC must intercept your phone calls’

Nigeria’s telecom sector regulator, Nigerian Communication Commission (NCC) said it is seeking legal backing to intercept the calls of subscribers to protect them and ensure the security of the nation. Read More

PRESS OFFICES

Sage ERP AfricaSAP AfricaSage Pastel AccountingTrust PayVMWareSamsung ElectronicsMitsumi DistributionPhoenix DistributionMTN BusinessSchneider ElectricMultichoiceMicrosoft 4Afrika

FEATURED STORY

Kenyan SACCOS riding on innovation to attract customersKenyan SACCOS riding on innovation to attract customers

As confidence in mainstream banks remains low due to prohibitive interest rates, customers are embracing Savings and Credit Cooperatives (SACCO) as an alternative.

IN DEPTH

As curtain falls on MDGs, what next?As curtain falls on MDGs, what next?

Dr. Bjorn Lomborg, president of the Copenhagen Consensus Centre, speaks to Biztechafrica about setting smart targets.