CA hints April ruling on call rate cut row as telcos file views


The Communications Authority of Kenya headquarters in Nairobi. FILE PHOTO | NMG

The parties fighting over the proposed reduction of mobile termination rates (MTR) will file their submissions on April 20 and the matter could be resolved soon thereafter, the ICT ministry has said.

The Communications Authority of Kenya (CA) announced it will cut the MTR per minute to Sh0.12 from Sh0.99 at the start of this year, but the decision was temporarily suspended after Safaricom #ticker:SCOM filed an objection at the Communications and Multimedia Appeals Tribunal.

MTRs are the charges levied by a mobile service provider on other telecommunications service providers for terminating calls on its network.

“The matter is presently pending before the tribunal where the parties have are expected to highlight their submissions on 20th April 2022. The tribunal shall thereafter give directions on when it shall deliver its judgment in the matter,” the Ministry of ICT told Parliament on Wednesday.

Safaricom argues that the regulator ignored the cost of doing business and instead relied on a benchmarking methodology in making the decision.

Its rivals Airtel Kenya and Telkom Kenya have meanwhile supported CA, saying no telco should make a profit from the MTRs.

The fight over the contested MTR cut has divided players in the telecommunications sector based on who stands to lose or benefit from the decision.

The dispute has revealed Safaricom as the biggest beneficiary of the interconnection fees.

“The net beneficially is Safaricom that received Sh883 million (quarterly) while the net losers are Airtel Kenya and Telkom Kenya,” the ICT ministry told Parliament.

This means that the leading telco books a net gain of Sh3.5 billion annually from the interconnection fees riding on its large market shares that see most calls terminate on its network.

The CA in its response to the tribunal said the benchmarking method is a stop-gap measure, adding that a cost study will be conducted at a later date and will be the basis of a further review of the tariffs.

The regulator said it expects a reduction in MTR to also lower calling rates for consumers.

Airtel said that by applying the interconnection charges, Safaricom receives more than 60 percent of the MTR pay-outs.

Smaller players like Airtel, on the other hand, remain net payers of interconnect charges.

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