Manthur Taneja, Essar’s managing director, wants CCK to adopt an asymmetric model that will see the small operators pay the market leader a lower termination rate. Photo/File
Mobile telecoms firm Essar is lobbying for a change in the way operators pay each other for calls originating from rival networks.
Essar, which operates in Kenya under the yu brand, wants the sector regulator, the Communications Commission of Kenya (CCK), to adopt a new method that will cut the cost burden for small operators.
Manthur Taneja, the company’s managing director, wants the regulator to adopt an asymmetric model that will see the small operators pay the market leader a lower termination rate.
The mobile operators currently charge each other a flat fee of Sh2.21 for calls terminating in their networks from outside but the CCK wants to review that rate to Sh1.44 in July.
Mr Taneja is proposing that a review of the termination rates to Sh1.44 should come with a clause that requires the small operators to pay market leader Safaricom a lower termination fee to level the playing field.
Safaricom’s grip on the market is so firm that eight out of every 10 calls terminate into its network, making it the top beneficiary of the current model.
New entrants
“We are not only asking CCK to lower the termination rates but to also introduce asymmetric model that will see small operators pay Safaricom a lower rate,” said Mr Taneja.
Countries such as South Africa have adopted the asymmetric termination fee system to protect new entrants into the market.
In October 2010, South Africa’s telecommunication regulator Independent Communication Authority (ICASA) introduced the model that has allowed operators with less than 25 per cent of the market to pay their rivals lower termination rates. Yu, which is the third largest telecoms operator – by subscriber numbers – last year increased its market share by 40 per cent to 2.2 million subscribers.
Its total minutes of usage however remains lower than the market leader’s.
Safaricom commands 77.8 per cent of the total voice traffic with 5.2 billion minutes of usage, followed by Airtel at 12.8 per cent, YuMobile at 8.53 per cent and Orange at 0.83 per cent
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