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CCK cuts mobile termination rate to Sh1.44

BUSINESS
By - Kenneth Kwama | Nov 27th 2012 | 2 min read
By - Kenneth Kwama | November 27th 2012
BUSINESS

By Kenneth Kwama

The Communications Commission of Kenya (CCK) has reduced the amount of money mobile companies pay each other for calls that terminate in a rival’s network.

The charge — referred to as Mobile Termination Rates (MTR) — was slashed from the current Sh2.21 to Sh1.44, and charges backdated to July 1 this year, effectively ending a war in the mobile industry pitting Airtel and yu who wanted the charges lowered against Safaricom and Telkom Kenya, which wanted the charges to remain as is.

The interconnection fees was set at Sh2.21 after it was slashed in July 2010 from Sh4.42. The rates were set to come further down in July last year to Shl.44, and follow a glide path that would have seen them settle at less than a shilling by July next year. But President Kibaki halted progress through a directive in June last year following intense lobbying from Safaricom and Telkom Kenya.

“Considering that the Commission suspended the glide path in order to evaluate these issues as presented by the industry, the CCK board has, in its sitting today, resolved to re-instate the glide path and implement the second phase of the mobile and fixed termination rates with effect from July 1,” stated the CCK in a statement to the media.

Review complaints

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.”

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