The Kenyan government wants to control the rates Safaricom charges rivals for terminating calls on its network to protect small telecommunications companies.
The new regulations set by the state aim to prevent dominant telecom operators from making profits on mobile termination rates (MTRs). In this regard, Safaricom will now charge a fee to cover only its competitors’ call interconnection costs.
MTR, according to business dailyare the charges that a mobile service provider levies on other telecommunications service providers for terminating calls on its network.
Kenya’s Information and Communication (Interconnection) Regulations 2022 paved the way for the Communications Authority of Kenya (CA) to control Safaricom’s interconnection call rates. However, this will only happen if Safaricom controls more than 25% of mobile services revenue.
Airtel and Telkom Kenya say current tariffs prevent them from competing with Safaricom.
“A dominant telecommunications licensee shall adopt cost-based interconnection rates as set by the Authority from time to time,” the new regulations state.
“A dominant telecommunications service licensee must set interconnection tariffs based on an objective criterion, respecting the principles of transparency and cost orientation,” he says.
Telecom operators will still be able to negotiate MTR rates. However, if the larger telecom operators fail to reach a fair deal with the smaller ones, the CA will be forced to set lower rates to allow the smaller operators to compete with the dominant operators.
Safaricom topped the 25% revenue share according to the latest industry data from the CA.
Telcos earned 280.1 billion shillings ($2.4 billion) in industry revenue, with Safaricom taking 82.4% of voice revenue, 78.4% of data, 83.8% of SMS and 97% other mobile services.
Airtel also gave figures that it pays Safaricom. It pays Safaricom 300 million shillings ($2.6 million) per month or 3.6 billion shillings ($31 million) per year in MTR, highlighting the adverse effect of high tariffs on their business.
By Zintle Nkohla
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