15 September 2012

Kenya: Safaricom Denies Hand in MTR Freeze

THE biggest mobile network, Safaricom has denied lobbying the government to stop further reduction of the Mobile Termination Rates. Last month, the president's office instructed the Communication Commission of Kenya to freeze the planned rate reduction, favoring Safaricom's stand which has been to get an new cost study done first.

"About the intervention, we do not know. We have nothing to do with how this was handled," said Safaricom Chairman Nicholas Ng'ang'a. The MTR which is the rate operators pay their rivals for connecting a call, thus determining the market rates for cross network calls, has stagnated at at Sh2.21 since 2010.

This is against an earlier plan by the CCK to gradually reduce it every year to the lowest possible level. In 2011, Safaricom which was joined by Telkom Orange heavily lobbied for a stop in the MTR reduction arguing it was badly affecting the industry's revenues. President Kibaki first stopped the glide in July 2011 and again this year. Now, the other two players Essar and Airtel have sent in a request to have their side heard by the president and the prime minister.

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