The Communications Authority of Kenya (CA) on Wednesday cut the rate mobile phone operators charge each other for interconnecting customers by Sh0.87 or 87.7 percent, signalling lower call tariffs.
The regulator cut the charges commonly referred to as mobile termination rate (MTR) from Sh0.99 to Sh0.12 to match shifts in technology that have made mobile telephony more efficient.
It’s unclear whether mobile operators, Safaricom #ticker:SCOM , Airtel Kenya and Telkom Kenya will cut their call-tariffs in the wake of the reduction.
However, the firms are not obligated to cut the consumer calling tariffs to match the Sh0.87 cut in the termination charge.
“Consumers will enjoy lower calling rates following the review,” CA director-general Ezra Chiloba said yesterday through a press statement.
“The review was founded on the recognition that higher MTRs mean higher calling rates for consumers.”
Industry data shows that the rate has been falling gradually from a high of Sh4.42 in 2011 to the just reviewed Sh0.99, which has been in place since 2015, marking a freeze of more than five years amid intense lobbying by some top telcos.
The cut could spark a price war should mobile phone operators opt to lower call tariffs. A previous cut in the rate in 2010 from Sh4.42 to Sh2.21 sparked a price war between Kenyan operators.
The CA said the cut will have a positive impact on both consumers and operators, adding the review will reduce the need for consumers to own multiple SIM cards as charges across networks come down.
“At the retail level, consumers will now enjoy access to a variety of affordable services across networks and at the wholesale level operators will have more price flexibility when developing innovative and affordable products,” said Mr Chiloba.
A smaller operator tends to pay more in mobile termination rates because its users are likely to spend more time on other networks than its own.The lower termination rates could benefit subscribers grappling with reduced spending power due to the adverse effects of the coronavirus pandemic.Mobile operators recently adjusted the cost of calls to other networks to reflect the recent change in excise taxes.Airtel now charges Sh2.78 to make calls to other networks per minute while Safaricom and Telkom charge Sh4.87 per minute and Sh4.30 to call rival networks respectively.The mobile termination rate was in 2012 cut to Sh1.44 per minute from Sh2.21 and subsequently to Sh0.99 in 2015. The then President Mwai Kibaki had in 2011 stopped further cuts after […]
