Regulator signals mobile operators to cut tariffs

By Kenneth Kwama

Telecom subscribers could soon enjoy low and stable calling rates. This follows a cut in interconnection rates.

The move follows a decision by industry stakeholders to lower Mobile Termination Rate (MTR).

The reduction from Sh2.21 to 1.60 per minute was struck a fortnight ago at meeting attended by representatives of mobile phone companies operating in the country.

 It was attended by the PS in the Ministry of Communications Bitange Ndemo and Communications Commission of Kenya (CCK) Acting Director General Francis Wangusi.

fight for subscribers

On Wednesday, Safaricom gave a hint of the looming struggle for customers by reducing the amount they charge pre-paid customers for cross-network calls from five to four shillings per minute. 

Airtel is also planning to roll out cost-effective on-net products in the next few days to draw and lock in more customers.

Although Safaricom has stated that the new rate is part of a promotion that will run until July 4, a highly placed source in the company told The Standard that the offer is likely to be permanent.

Wangusi confirmed the rates have come down and CCK board will sit and ratify the decision in the next few days. “We did agree on the new rates, but it is still pending ratification by the CCK board before we declare it officially,” said Wangusi.

There have been allegations that the State, through Ndemo, has been working hard to scuttle progress in the implementation of MTR.

But Ndemo refuted the claims when asked why Government did not stick to the original glide path, which would have brought down the rates to Sh1.44 by July last year before settling at 80 cents this July.

State denial

Ndemo also disputed claims the Government was not keen on implementing the original glide path, which was agreed after a study conducted by international firm, Analysis Mason.

“There has been a dispute, which we have been negotiating to solve. It was a bit difficult to stick to the original glide path because cost of things like fuel and other items that were used in the original costing went up,” said Ndemo.

Wangusi told The Standard that CCK would soon commission another study on termination rates to determine if the regime used locally is suitable for the industry.

“We will commission another study but whatever its findings, the agreement is that the termination rate will remain at Sh1.60.  If the new study reveals that the rate should be higher, we will still stick with Sh1.60, but we could consider bringing it down if the study reveals that the figure should be lower,” said Wangusi.