Kenya’s mobile telecom giant, Safaricom, turned to the government in their bid to have its rivals’ cheaper calling rates reduced on Tuesday.
At a meeting with Parliament’s Energy and Communication Committee, the Safaricom delegation led by the Chief Executive, Bob Collymore, said the low calling rates to other networks meant it will have to go slow on its expansion plan.
The mobile giant gave examples of similar price wars in Uganda, Sri Lanka, and the Democratic Republic of Congo, all of which were geared to show the dangers of low “mobile termination rates” – money charged for making calls across networks.
The Sri Lankan example, the committee heard, was in 2009 when a new operator entered the market and ignited a price war by lowering calling prices significantly with the effect that most subscribers were calling outside the network.
With less incoming revenues –there’s was no interconnection fee —the other operators threatened to stop the interconnection because they were not being compensated for the increase in incoming traffic.
By Staff
