Cheaper calls on the way as telcos agree to cut key rates

Mobile subscribers could soon enjoy lower voice calls following a move by the Communications Authority of Kenya (CA) to cut mobile termination rates by 41 per cent.

This follows an out-of-court settlement by the leading telcos on an appeal lodged by Safaricom challenging an earlier decision by the regulator to reduce mobile termination rates - the charges levied by a mobile service provider on other providers for terminating calls in its network - by 87 per cent.

"The current mobile termination rate (MTR) and fixed termination rate (FTR) be revised from Sh0.99 to an interim rate of Sh0.58 (Revised Interim Rate)," reads the judgement from the Communications and Multimedia Appeals Tribunal delivered yesterday.

Last year, CA announced that the mobile termination rates for local voice calls across networks would fall from Sh0.99 to Sh0.12, an 87 per cent cut that was expected to come into effect from January this year.

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However, Safaricom lodged an appeal at the Communications and Multimedia Appeals Tribunal, accusing CA of flouting the due process and using a wrong benchmark to come up with the proposed rates.

"The respondent (CA) adopted a procedure that was unreasonable and procedurally unfair in arriving at the impugned decision contrary to Article 47 of the Constitution as well as section 4 of the Fair Administrative Action Act, 2015," said Safaricom in its appeal.

The telco further said CA did not provide the information, materials and evidence it used to determine the new rates and accused the regulator of using false comparisons with other markets to arrive at its decision.

Airtel Kenya, Telkom Kenya, Jamii Telecommunications Ltd and the Consumer Federation of Kenya were all interested parties in the case.

The tribunal further ruled that CA should conduct a network study on the industry to determine new call rates.

"The revised interim rate will apply for a period of 12 months from August 1, 2022," said the tribunal in its ruling.

"Upon conclusion of the Network Cost Study, the authority will without undue delay implement a new MTR and FTR."

Telkom Kenya yesterday welcomed the judgment, saying it opted for the out-of-court settlement "for the sake of time."

"In the interest of time and to avoid a protracted court process that would rob consumers of the imminent benefits of reduced MTRs and FTRs, Telkom and the other parties agreed to settle the matter out of court and recorded a consent judgment at the CAMAT," said the company in a statement.

Call termination rates are critical because they set the ceiling that mobile operators can price their voice calls to consumers and could significantly affect the pricing of both on-net and off-net calls.