Calling rates might go up despite lower interconnection rate

By  Kenneth Kwama

Mobile phone charges might still go up despite the decision by the Communications Commission of Kenya (CCK) to lower mobile interconnection rates.

The Standard has reliably learnt that at least two mobile companies are planning to hike prices in the next three months.

Two weeks ago, yuMobile’s CEO, Madhur Taneja had said that price hikes would be inevitable if the Mobile Termination Rates (MTR) do not come down. The rates were, however, lowered from Sh2.21 to Sh1.44 per minute by the CCK last Monday, and the implementation backdated to July 1.

Asked if it would still carry on with the planned increase, yuMobile was elusive and instead praised CCK for reducing the rates.

“The reduction in MTR is something that yuMobile has been strongly supporting and we are glad that the merit of this reduction has been seen and thus implemented.   This reduction is best for the industry growth as it helps create a level playing field, and thus is beneficial to the consumers whom we serve,” said Taneja.

Detailed determination

Safaricom, which will be affected most by the decision to reduce interconnection rates, said it was still awaiting a detailed determination from the CCK before it decides on the way forward.

“The whole thing is not just about prices or reduction of MTR rates. There are many other important things that need to be sorted and that can only be done once we get more detailed communication from the CCK,” said Safaricom’s Director of Regulatory Affairs, Nzioka Waita.

Airtel Kenya yesterday congratulated CCK on what its chief executive Shivan Bhargava referred to as ‘the milestone reached in the decision to lower MTR.

“The decision to revert to the approved Glide Path will aid the development of the industry and the economy and provide opportunities for a better overall quality of service and affordable experience for the Kenyan consumers,” said Shivan.

Glide path

The commission hired a consultant to review complaints from mobile companies that were opposed to the implementation of the glide path and yesterday said the consultant had submitted the final report to the Commission.

“The findings of the study confirm that contrary to the allegations made by some players in the market, retail price competition has not had any adverse impact on the economy. In particular, the study established that competition had no adverse effects on the quantum or stability of tax revenue.”