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Telecommunication firms have agreed to slash mobile termination rates to Sh0.58 per minute, giving hopes of cheaper calls for Kenyans amid increased excise duty charges that made voice calls less attractive.

A statement by Safaricom, Telkom Kenya, Airtel, and Jamii Telecom and Communication Authority of Kenya (CA) said the cut followed a consultative process between the authority and mobile network operators.

“We are happy to announce that the Communication  Authority of Kenya ( the Authority)  and Mobile Network Operators (MNOs) have through a consultative process mutually agreed on an interim Mobile Termination Rate ( MTR) and Fixed Termination Rate of Sh0.58,” it added.

The interim rate will apply for the next one year, effective from August 1, 2022, then after,  the authority will issue new rates based on the outcome of the ongoing Network  Cost Study, according to the statement.

MTRs are the charges levied by a mobile service provider on other telecommunications service providers for terminating calls on its network. On December 23, 2021, CA announced it will cut the MTR per minute to Sh0.12 from Sh0.99 at the start of this year, but the decision was temporarily suspended after Safaricom filed an objection at the Communications and Multimedia Appeals Tribunal.

Safaricom, which dominates with 64 per cent market share, instead wanted the rates to be increased to reflect the true cost of operations.

Airtel and Telkom have 27 per cent and 7 per cent market share respectively, according to 2021 data by the authority.

Market dominance

Small telecommunication firms on the other hand accused the regulator of bias and ignoring of market dominance in the allocation of mobile spectrum thus giving Safaricom more advantage over the rivals.

This has made small operators compensate Safaricom a huge chunk of voice revenues since most of their own subscribers are likely to spend more time calling subscribers of dominant networks such as Safaricom.

Safaricom pays its rivals about Sh2.6 billion from an estimated Sh6.5 billion it earns from MTR annually, giving it a profitability upper hand over small telcos.