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Why MPs want new call termination rates halted

Why MPs want new call termination rates halted
Legislators say CA proceeded to announce new Mobile Termination Rates at Sh0.41 per minute yet its own report had proposed it at Sh0.06. PHOTO/Print
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A section of lawmakers wants Communication Authority of Kenya (CA) to stop implementation of new termination call rates set to take effect in March next year.

The move by the lawmakers comes after  it emerged that the authority disregarded a report that had proposed a lower rate. MPs Bernard Kitur (Nandi Hills), Gideon Kimaiyo (Keiyo South) and Irene Mayaka (Nominated) argue that CA proceeded to implement the new Mobile Termination Rates (MTRs) and Fixed Termination Rates (FTRs) at Sh0.41 per minute yet the authority’s own report had proposed it at Sh0.06.

MTR is the cost per minute telecommunication operators charge each other to allow customers to communicate across networks and always favours the dominant player. Led by Kitur, the MPs claimed that the rush by CA to implement the new rates is suspect and in bad taste and should therefore be stopped to allow for further consultation.

Service providers

Speaking in Parliament, the legislators threatened to raise the matter on the floor of the house in order to force CA to stop implementing the new rates.

Last week, CA announced that it had capped MTR at Sh0.41 per minute effective March 1, 2024.  Currently, telecommunication service providers are implementing an MTR and FTR of Sh0.58 per minute

Said Kitur: “CA must retract so that as MPs we can deliberate on this. We are conscious of dealing with the cost of living. We cannot then allow such a thing to happen, especially now that the president is dealing with this matter. It is unfortunate that they are people who are not interested in helping Kenyans.”

The sentiments by the legislators came after CA tabled before the departmental committee on Information and Innovation (CII) chaired by Dagoretti South MP John Kiarie a study done by Tilil Technologies and Acacia Economics for national roaming, telecommunications that proposed a reduction of the rates to 0.06.

The study proposes that CA glides towards termination rates that trends towards zero as most in most countries termination rates are falling towards zero and in others have been capped at zero.

“Our cost model suggests a cost of approximately KES0.06. We suggest a bill and keep the SMS termination rate regime for Kenya,” the report reads in part.

It adds: “Termination rates are falling towards zero in many countries and have been set zero in many countries and we therefore expect termination rates to fall substantially in Kenya.

Last week, while appearing before the Departmental Committee on Communication, Information and Innovation Safaricom Chief Executive Officer (CEO), Peter Ndegwa disagreed with the proposed lower MTRs, saying that it poses a challenge to Government revenue collection, asserts pressure on the cost of doing business, among other negative implications.

“We urge that the aggressive reductions are halted to provide the much-needed time for economic stability to be achieved. This will allow CA time to implement a favourable MTR reflective of the industry realities,” said Ndegwa.

However, Telkom Kenya CEO, Mugo Kibati and Jamii Telecommunications Ltd CEO, Joshua Chepkwony and, Airtel Kenya’s Managing Director, Ashish Makhotra, expressed support for the proposed review of MTRs.

And speaking in parliament, the lawmakers demanded that CA either implement what the study proposes or fix the rates at 0.00.

 The lawmakers argued that reducing the call rate to zero would mean cheaper calls across networks and relief for millions of Kenyans who are currently overburdened by the higher rates.

Punitive rate

 Mayaka accused CA of going against its own study which had proposed a lower rate by implementing a punitive rate and wondered why CA was in a rush to implement the new rate yet public participation has not been done.

The nominated lawmaker said: “What is the rush for? What is the rationale they used to arrive at Ash0.41 when their own research shows that it should be set at Sh0.06?”

 Kimaiyo said setting the rates at Sh0.00 is the only way to balance competition in the telecommunication sector as this will eventually reduce the call charges for Kenyans.

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