BUSINESS

Chiloba Slashes Call Rates in Latest CAK Action

Share
Communications Authority of Kenya Director-General Ezra Chiloba. He highlighted expectations that the reduction of the MTR would benefit consumers.
Communications Authority of Kenya Director-General Ezra Chiloba. He highlighted expectations that the reduction of the MTR would benefit consumers.
Share

Communications Authority of Kenya (CAK) Director-General Ezra Chiloba on Wednesday, December 22 announced an 87.7% reduction of Mobile Termination Rate (MTR) – the rate telcos charge each other for interconnecting customers.

The MTR was lowered from Ksh0.99 to Ksh0.12, representing a Ksh0.87 drop. The Authority cited developments in mobile telephony and connectivity as informing the move.

It is the first review of the MTR in six years. The rate has fallen consistently from Ksh4.42 in 2010 to Ksh0.99 in 2015 and, now, Ksh0.12.

While mobile service providers are not required to lower tarrifs to match the MTR, it is expected to result in lower call rates.

“Consumers will enjoy lower calling rates following the review.”

READ>>Capital FM, NRG Radio Frequencies Revoked in CAK Crackdown

“The review was founded on the recognition that higher MTRs mean higher call rates for consumers,” Chiloba noted in a statement.

Many Kenyans own mutliple SIM cards to avoid the comparatively higher call rates charged when calling people on a different network.

CA highlighted its expectation that the MTR review would lessen the need for consumers to own multiple SIM cards. Analysts note that the slashing of the rate could likely spark a price war among leading telcos.

Market leader Safaricom could face heightened competition for voice services from the likes of Airtel and Telkom who have been lobbying for regulation to even the industry playing field.

In 2010, reduction of the MTR by half, from Ksh4.42 to Ksh2.21, sparked an all out price war among operators resulting in cheaper call rates.

READ>>Safaricom Announces Opportunities for Graduates

 

Written by
MARTIN SIELE

Martin K.N Siele is the Content Lead at Business Today. He is also a Quartz contributor and a 2021 Baraza Media Lab-Fringe Graph Data Storytelling Fellow. Passionate about digital media, sports and entertainment, Siele also founded Loud.co.ke

Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *

PAST ARTICLES AND INSIGHTS

Related Articles
CBK
BUSINESS

CBK Accepts KSh33.35Bn in latest Treasury Bills Auction

CBK accepted KSh 33.35Bbillion out of KSh 41.72 billion in bids in...

NSE
BUSINESS

NSE Derivatives Market Turnover Hits past KSh 1 Billion

  NSE (Nairobi Securities Exchange) has surpassed the KSh 1 billion turnover...

CBK
BUSINESS

CBK Seeks KSh50Bn for Budget Support in October

CBK (Central Bank of Kenya), the Government’s fiscal agent is seeking for...

ABSA TO FINANCE SOLAR POWERED COLD STORAGE FACILITIES
BUSINESS

Absa Bank Kenya Partners with UN Agencies to Finance Cold-Storage Facilities

Absa Bank Kenya, United Nations Capital Development Fund(UNCDF) and United Nations Development...