Tribunal to rule on mobile tariffs cut on August 5


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

Telecommunications firms fighting over the proposed reduction of mobile termination rates (MTR) will know their fate in less than six weeks, the Communications and Multimedia Appeals Tribunal has revealed.

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 filed an objection at the tribunal. The regulator said it expects a reduction in MTR to also lower calling rates for consumers.

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

Business Daily has established that the tribunal is expected to deliver a ruling on the matter on August 5, according to sources engaged in the litigation.

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 backed by consumer lobby, the Consumers Federation of Kenya (Cofek), 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 earlier 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.

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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