The Communications Commission of Kenya (CCK) ha today announced that the Mobile Termination Rates (MTR) are going to go back to the glide path which was agreed upon. The glide path was suspended in 2011 after Safaricom and Orange Kenya appealed to the President to suspend the implementation of the same.
CCK has therefore lowered the MTR to Sh1.44 from the current Sh2.21 and backdated it to July 2012. This means that the operatrs will enjoy only a four month reprieve and not the 16 months which were wasted during the suspension of the MTR glide path. Two mobile operators, Essar Telecom (yuKenya) and Airtel, would benefit most from this development.
However, CCK Director General Francis Wangusi revealed that the operators are not obliged to reduce call charges in response to the low MTRs which have just been announced. The regulator also threatened “any operator which would use the new MTR to kill competition that they would be punished.”
The regulator was however silent on what will happen to operators which use political connections to stop the implementation of the MTRs.
The new MTRs mean that the operators will have to adjust the fee which they are owed by the competitions since July 2012.
Mr Wangusi said, “The board approved the new rates after going through the KIPPRA report that shows the low MTR did not have a negative impact on tax collections, employment in the sector and on the Nairobi Stock Exchange.”
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But part of the statement by the CCK boss reads, “As an evidence-based regulator, CCK, shall if necessary, adjust the MTR in line with the findings of the network cost study expected to be carried out in the next financial year.”
This means that CCK might have to pay a consultant to do another study before applying the next MTR rate next year.