Termination charges appeal rejected in Kenya

Safaricom and Telkom Kenya’s appeals for increased termination charges have been rejected by the Communications Commission of Kenya (CCK). The termination charges are the amount operators have to pay rivals when subscribers phone across networks.

Safaricom CEO Bob Collymore (image: file)

“The regulator says the appeals by the two firms will hinder competition in the mobile telephony market, a position that was supported by Airtel and Essar, opening a new battlefront in the voice segment,” wrote Business Daily.

Francis Wangusi, the acting director-general of the CCK said that the commission won’t be negotiating the rates. “We are not going to negotiate with any operator to have the rates revised upwards or conduct another study. As a commission we want the rate to go as low as zero shillings so as to increase competition in the sector.”

Wangusi added that operators are simply looking for a reason to increase their tariffs. “The interconnection rate does not affect what they charge their subscribers, they can raise the retail tariffs if they want but they fear a rebuttal from their subscribers who can opt for other affordable networks, to me they are simply looking for a reason to justify an increase.”

But Safaricom doesn’t agree with the ruling. “We believe CCK’s rigid implementation of an extremely low MTR that does not reflect market costs could cripple the industry,” said Nzioka Waita, corporate affairs director at Safaricom.

“Artificially low termination rates do not allow operators to fully recover the cost of receiving and terminating calls received from other networks and this significantly impacts the network receiving the largest number of cross-network calls such as Safaricom,” he added.

Charlie Fripp – Online editor