The Star (Nairobi)

27 August 2012

Kenya: Competition Agency to Rule On Call Rates

THE Competition Authority is expected to give the way forward on how much mobile network operators should charge for allowing calls from each other networks.

The authority has now been asked to determine the Mobile Termination Rates after the Communication Commission of Kenya board failed to reach an agreement.

The MTR, which is the rate callers' operator pays the receiving one for connecting a call, was expected to be cut down in July, but the regulator has not given the order yet with varied stands taken by the operators. The authority's decision will eventually determine how much consumers pay for cross network calls. Currently yuMobile and Airtel charge Sh3, Telkom Sh4 while Safaricom charges Sh5 per minute.

"The MTR issue has been forwarded to the Competition Authority," said Information and Communication PS Bitange Ndemo on Friday. The recently operationalised competition body is mandated to regulate market conduct by ensuring that prices are determined by forces of supply and demand and that some companies do not abuse their positions for example by barring new entrants or pricing unfairly.

Currently the MTR is at Sh2.21 and was expected to be reduced to Sh1.44 at the beginning of July 2011 but the glide plan was put on hold for a year following intense lobbying by Safaricom and Telkom Kenya that the low call rates were eating up to their revenues. However, Essar and Airtel wanted the rate to be reduced further so that they continue with their 'lowest call rates' strategy they use to capture the mass market.

In May, the operators, CCK and the ministry met and reached a compromise Sh1.60 rate. However it later emerged that not all operators were agreeable to the rate delaying the CCK board decision. "We are making progress. I'm sure this will be resolved soon," said the PS. Meanwhile, the ministry has ordered all operators to make sure all mobile internet users have an IP address to curb spread of anonymous, hateful messages during this election period.

An IP (Internet Protocol) is a numerical label assigned to each device used in network communication and helps in host or network interface identification and location addressing. Ndemo said all mobile firms have up to December to have the identification numbers for the estimated 18 million mobile internet subscribers.

"Every gadget must have an IP address. You cannot do anything you want and think you cannot be traced," he said. This will also address increasing cases of internet fraud. The PS was speaking after attending an event to launch an E-commerce service from shoe-makers Bata. Bata home service will enable consumers make orders online, pay through Pesapal money service and have the shoes delivered to their homes.

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