How Revised Termination Rates Ease Financial Burden From Airtel, Telkom Kenya

How Revised Termination Rates Ease Financial Burden From Airtel, Telkom Kenya

Airtel kenya Towards the end of 2021, ICT regulator the Communications Authority of Kenya (CA) announced plans to cut call termination rates, also referred to as mobile termination rates (MTRs) from KES 0.99 to KES 0.12 per minute.

The new rates were supposed to go live on Jan 1, 2022. However, the development has since been disputed, mainly by Safaricom, which argues that the rates were not arrived at procedurally and that the CA failed to take note of stakeholder input submitted previously.

Telkom Kenya, and Airtel Kenya, on the other hand, continue to support the new termination rates, with the overall argument being that the consumer will pay less when making calls, especially to other networks.

Benchmarking Methodology

To reiterate, Airtel firmly supports the new MTRs and had previously taken part in the review exercise.

It should be remembered that Airtel suggested the use of the benchmarking method during the review of the termination rates, arguing that cost study data was not immediately available, and resources/time involved to collect the data would be enormous.

The points were supported by a variety of reasons. First, a comprehensive cost study was last done more than a decade ago in 2010. The cost study was therefore dated and did not accurately reflect the current cost situation.

Secondly, in the assessment of the current MTR, time is of the essence. Small operators have been making representations to the CA for the review of the current MTR, based on the economic burden that they have borne for a long time.

Airtel said it believed that it was urgent that the Authority listened to these small operators.

Finally, Airtel added that it would be more cost-effective for the CA to use Benchmarking methodology for the now-concluded review, given the necessary data was already available to reach a reasonable conclusion.

The same process (benchmarking), Airtel argues, is what other leading nations across the globe use. The Rationale for Airtel Kenya’s Recommendations At the start of the review of MTRs, Airtel suggested to the CA to reduce termination fees.Airtel argued that high MTRs have been a burden to small operators, and have made them hard to compete with leading telcos (in this case, Safaricom), because high MTRs often favour the latter. MTR should be cost-based and operators should not profit from interconnection but merely recoup costs incurred in carrying additional traffic from the other operators’ networks. – the CA Data has since revealed that […]

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