Airtel, Telkom, Cofek Back Chiloba Vs Safaricom on Lower Tariff

Telcos Airtel Kenya and Telkom, as well as the Consumers Federation of Kenya (Cofek) have thrown their weight behind the Communications Authority of Kenya (CA-K) and its Director General Ezra Chiloba following the 87.7% reduction of the Mobile Termination Rate (MTR).

Safaricom had petitioned the Communications and Multi-media Appeals Tribunal after CA Director-General Chiloba announced the lowering of the MTR from Ksh0.99 to Ksh0.12. It was the first review of the MTR in six years.

The Mobile Termination Rate refers to the rate telcos charge each other for interconnecting customers. As the country’s largest telco, Safaricom felt disadvantaged by the decision, arguing that the regulator should have adopted a cost modelling approach as opposed to international benchmarking to determine termination rates.

The company further maintains that public participation was not properly undertaken with stakeholders including itself allegedly not given a chance to voice their concerns.

“The applicant stands to suffer substantial and irreparable loss unless this application is heard, and a stay of the decision is granted as a matter of urgency,” Safaricom states in the suit.

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The rates were reportedly dropped following intense lobbying by a number of the telcos.

Safaricom’s rivals, Airtel and Telkom, joined the case backing CA’s position that the move will bring charges down across networks and reduce the need for consumers to own multiple SIM cards.

The telcos believe that the reduction of the MTR will help ensure a level playing field in the industry protecting smaller operators.

Because their customers are likelier to spend more time on other networks than its own, smaller operators pay more in MTRs.

“Globally, big and dominant players or incumbents in mobile telephony markets have had a pricing advantage due to the imbalance of connecting traffic between themselves and other network operators. Higher MTRs and FTRs also have the potential to negatively impact the consumer if these larger operators are to price discriminate between on-net and off-net calls,” stated Mugo Kibati, CEO Telkom Kenya.

The tribunal chaired by Rosemary Kuria suspended implementation of CA’s decision on the MTRs until the appeal is heard and determined. The new rates were to take effect from January 2022.

The matter will next be brought before the Tribunal on February 2.

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