Airtel asks Kenya’s “two principals” to step in on MTR cutback

Mobile network operator Airtel Kenya has written to President Kibaki and Prime Minister Raila Odinga asking the two leaders to intervene and declare a joint stand on the ongoing differences in the telecommunications industry concerning mobile termination rates (MTR).

On August 29, Airtel Kenya’s managing director Shivan Bhargava wrote to the two leaders requesting for an audience. Sources say the meeting requested was to discuss the government’s refusal to fulfill its promise to reduce the MTR — what the mobile providers pay for terminating cross-network calls.
This is after the President Kibaki through his private secretary Nick Wanjohi asked the Communication Comission of Kenya (CCK) not to implement the new MTR until the ongoing research study by the Competition Authority is complete.
In July 2011 after meeting with the country’s mobile network operators, the government is reported to have promised to reduce the MTR to KSh1.44 (US$0.02) from the current price that differs depending with the networks provider. Safaricom charges KSh5 (US$ 0.06), Orange Kenya KSh4 (US$ 0.05), Essar YU (US$ 0.04) and Airtel Kenya are the lowest at KSh3 (US$ 0.04.)
Earlier on, Kibaki had ordered the CCK to reduce the MTR charges up to KSh2.21 (US$ 0.03) but the move was viewed to in favor of Safaricom and Orange Kenya.
Safaricom and Orange Kenya requested the CCK to allow the MTR to remain as it is until the ongoing research on MTR by the competition Authority commission is completed. Airtel and Essar Yu however argue that the status quo favors the market leader.
Bhargava said that the Kenyan government is reluctant to fulfill the pledged promise, the Daily Nation reported.
He further claims that, Airtel’s investment in the market was based on postulation of a liberalized sector and the government’s move to lower MTR.
Bhargava noted that the move by the government has resulted to losses to the company
When the tariff policy was implemented in 2010 the MTR dropped to more than 50 percent, Safaricom to other networks was at KSh4 (US$ 0.05), Orange Kenya, Airtel Kenya and Essar Yu at KSh3 (US$ 0.04.)
If all goes through then according to the 2010 tariff, making calls across a different network would be tagged at KSh0.99 (US$0.01) by July 2013.

Bharti Airtel operates in Asia and Africa. The main office is in New Delhi, India. The telecommunication company provides 2G, 3G and 4G mobile services, fixed line, broadband via DSL, IPTV, DTH, enterprise services such as national & international long distance services to carriers.

The company is February reported it had more than 246 million customers across its entire operations worldwide.

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