The protracted 13-year fight by minority players in the local voice market to have inter-operator call tariffs lowered to evenhanded levels is set to spill over to a 14th year in 2024.
This is after the Communications Authority of Kenya (CA) last month effected a lower-than-expected cut to Sh0.41 per minute as opposed to the Sh0.06 recommended by a study the regulator had commissioned.
Commonly known as Mobile Termination Rates (MTR), the fees refer to charges levied by a mobile service provider on other telecommunications service providers for terminating calls on its network.
The vicious battle to lower the tariffs started with intense lobbying from smaller market players in 2010 when the rates stood at a high of Sh4.42, prompting the regulator to slash them by half to Sh2.21 before reducing them further to Sh1.44 in the following year and later to Sh1.15 in 2012.
Airtel, Telkom Kenya and Equitel, which have over the entire stretch of the journey been accusing market leader Safaricom of abusing its dominance by opposing efforts to lower the tariffs, proceeded to bag another major win in 2015 when the rates were cut further to Sh0.99 before a freeze that saw the charges remain unaltered for six years.
In 2022, CA came for another chop that left the rates at Sh0.12, extending the contest that has divided industry players based on who stands to lose or gain.
The 2022 slash was however temporarily suspended after Safaricom filed an objection suit at the Communications and Multimedia Appeals Tribunal arguing that the new rates did not reflect economic realities and calling on CA to instead raise the charges to mirror the true cost of doing business.
The minority telcos, on the other hand, have been calling on the telecommunications watchdog to create a level-playing field, as they lamented repression by Safaricom which charges rivals more than it pays out to them courtesy of its enormous voice market share.
In August 2022, just days before the tribunal was set to issue its determination, Safaricom reached an agreement with the regulator to have the rates cut by a more tolerable margin to Sh0.58 on an interim basis for one year.
As part of the settlement, the parties agreed that CA would conduct a new cost study and would implement a new MTR based on the findings after 12 months.
On November 17 this year, months after the lapse of the August deadline, CA set the MTR at Sh0.41 which it said would apply for two years starting March 1, 2024, while retaining the SMS termination rate at Sh0.05 per message.
The regulator however came under fire after it emerged that its cost study had recommended the rate to be set at Sh0.06.
In late November, the Communication, Information, and Innovation Committee of the National Assembly took CA to task to explain why it effected a smaller-than-recommended cut against the findings of its own commissioned study.
The MPs accused CA of acting suspiciously likely to suggest that it was in bed with one of the players (read Safaricom) in the industry.
In its defense, the regulator has cited the need to strike a balance in protecting both investments and customer interests, with immediate former acting Director-General Christopher Wambua saying the decision was informed by the prevailing forex environment, annual inflation, cost of capital, asset depreciation as well as volume of traffic.
“CA will only think of gliding to Sh0.06 and even to zero MTR within a period of four years if the Kenya shilling strengthens against the dollar,” said Mr Wambua in December.
