CCK defies President, set to lower mobile termination rates

Kenya’s telecom regulator the Communications Commission of Kenya (CCK) has defied the President’s orders against cutting Mobile Termination Rates (MTR), highlighting the autonomy of parastatals in the country.

CCK argued on Thursday morning in a position paper that a letter ordering it not to cut the rates lacks authority according to the new constitution as it was written by the President’s private secretary Nick Wanjohi.

The letter instructed the CCK to suspend any reduction in MTR – the rate mobile networks charge each other for calls terminating in their systems from rival networks – until an impact study had been completed and presented to the president.

The regulator is now expected to announce a reduction in the MTR as planned, from Sh2.21 to Sh1.44 or Sh1.60.

The position paper, quoted in Business Daily, said that the president’s instruction cannot be effected as it breaches Article 135 of the Constitution, which states “a decision of the President in the performance of any function of the President under the Constitution shall be in writing and shall bear the seal and the signature of the President.”

The CCK argued that it is against the law for the Executive to interfere in its operations and against its autonomy as provided for by law.

“The letter seems to take away the statutory independence of the commission in undertaking its functions as expressed in clause 5B of the Kenya Information and Communications Act Cap 411A,” the paper stated.
The MTR debate has rumbled on for two years and been divisive. Safaricom, the leading telco in Kenya with over 20 million subscribers, argues that a further reduction in the MTR does not make business sense and will make running telcos expensive and in the end affect the consumer through poor services. Orange Telecom has the same view, while Airtel and Essar think the rates should be reduced.

The Kenya Institute for Public Policy Research Analysis (Kippra) has reported that lower termination rates boosted the telcos revenues, increased their subscribers, increased traffic and also aided mobile penetration, perhaps supporting the views of the CCK, Airtel and Essar.

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