Telecom rates to continue fall in Kenya

In a bid to see mobile telephone voice call rates leveled, Safaricom and Telkom Kenya were disappointed that their efforts to keep further reductions in prices were not successful. On Wednesday, the government announced it would not intervene to halt the further falling in call rates in the country.

The two mobile operators had hoped that there would be a price freeze on interconnection chargers – those which operators pay rival networks for handling their calls – and analysts said the rates are expected to drop from Sh2.21 per minute to Sh1.44 in July and Sh1.25 the following year.

The result is that operators would have the opportunity to further reduce voice charges and could lead to the resumption of price wars in the country, that have already left many operators struggling to remain in the black.

Earlier this year, both Telkom Kenya and Safaricom had asked the government to intervene to hold the current rates for two years, saying that by continuing to allow price reductions it would hurt operators’ profits, jeopardize job security and slow the country’s efforts to bolster new investment in the telecom sector.

The Prime Minister’s office established a task force that would determine whether to revise the current telecom prices set by the Communications Commission of Kenya (CCK).

“Nothing has changed and mobile termination rates were done through consultation and they shall remain as such,” CCK Director-General Charles Njoroge told reporters.

He continued to say that the continued fall in connection charges “does imply that calling rates will fall,” adding that the government is keen on letting the market decide the final cost of voice charges.

By Staff