More than 28 million mobile phone subscribers in Kenya rely on phones for voice calls, Internet and text messaging each day, says Communication Commission of Kenya (CCK), Kenya’s communication regulator.
Analysts however say the high prices charged by the mobile service providers remain a hindrance to many phone users — especially in making calls across networks.
A new move by the communications regulator to have mobile termination rates cut by 35 percent by July this year is expected to make the services more affordable.
CCK’s acting director Francis Wangusi said the termination rate would drop from the current KSh2.21 to KSh1.44 per minute in July. The communication regulator in July 2012 slashed the interconnection fees from KSh4.42 to reach the current KSh2.21.
CCK says it expects the rates to come down to 0.93 cents by 2013. However, the cut to KSh1.44 did not go as planned in 2011.
Even as CCK works to lower the Mobile Termination Rates (MTR) by July this year, the major mobile operators are opposed to the move. Last year Safaricom and Telecom Kenya, Kenya’s major telephone network operators, argued the move was business-unfriendly.
Analysts say the operator’s argument dispute what Wangusi said — that lowering termination rates had no effect on their profits as they were to pay less to their competitors in terms of fees.
Wangusi presented the case of Safaricom which had Sh19 billion as revenue in the last quarter, and only had to pay Sh500 million as MTR.
Kenya’s ministry of information and communication permanent secretary Dr. Bitange Ndemo also insisted that a fresh study had to be conducted to assess the policy.
Ndemo argued that the regulator could not go ahead to implement the policy without consent of the operators. Bob Collymore, CEO Safaricom, says a case study has to be done. According to him, the move by CCK is not ideal for business.
His Airtel counterpart Shivan Bhargava, had previously indicated willingness to cooperate with the regulator. Airtel is unwilling to lower its tariffs further.
Other operators seem to agree with the move. Yu Mobile’s MD Madhur Taneja said slashing the MTRs would mean lower calls for Kenyans. Users in Kenya hope the mobile termination rates would still be slashed and are anxious to make affordable calls.
