[kictanet] Fwd: Voice charges to fall further with revised rates

[Eng. Wainaina Mungai]

Something for the *real* "consumer" to celebrate ;-) ....


---------------
By MARK OKUTTAH
27 April, 2011

Safaricom and Telkom Kenya have lost their bid to stop the reduction of
mobile telephony interconnection charges in June, setting the stage for a
further fall in calling rates.

Interconnection charge —which operators pay rival networks for handling
their calls—is set to drop from Sh2.21 per minute to Sh1.44 in July and
Sh1.25 in July 2012, giving the operators room to further reduce their per
minute voice charges.

In February, Telkom Kenya and Safaricom asked the government to put on hold
for two years the annual reduction of interconnection charges that started
in 2006, arguing that it would intensify the ongoing price war and hurt the
operators’ profits, jeopardise job security and slow new investments in the
local telecom arena.

This prompted the Prime Minister’s office to form a task force that will
determine whether to hold off revising the charges or let the revisal run as
earlier set by the Communications Commission of Kenya (CCK). The taskforce
returned a verdict that charges should run their course.

“*Nothing has changed and mobile termination rates were done through
consultation and they shall remain as such,*” said Charles Njoroge,
Director-General, CCK.

He added that the downward fall in the connection charges does imply that
calling rates will fall adding that tariffs are mainly influenced by market
forces.

The government’s verdict is a blow to Telkom Kenya—the operators of the
Orange network—and Safaricom who, unlike their rivals Airtel and Essar, have
criticised the free fall in airtime prices, made possible by the fall in
interconnection charges.
The charges dropped to Sh2.21 in July from Sh4.42 in July 2009, giving
Airtel room to set off a vicious price war in Kenya’s voice market that has
seen tariffs fall by more than 50 per cent since August, cutting
subscribers’ monthly budget for airtime by half.

The interconnection charge has come down from Sh6.28 in July 2007 to Sh2.21
last July and was set to drop to Sh1.44 this year and Sh0.99 in 2013.

The reduction of the interconnection fee was informed by the need to reduce
the cost of calls across networks, which had remained as high as Sh25 in
2007, compared to Sh12 for calls within the same network.

This made it difficult for the small operators to gain market share from
Safaricom, whose stake was about 83 per cent and who effectively used the
high cross-network charges to win subscribers and discourage subscribers
from switching networks.

.....

http://www.businessdailyafrica.com/Corporate+News/Voice+charges+to+fall+further+with+revised+rates/-/539550/1151370/-/qe2ssg/-/index.html
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <https://lists.kictanet.or.ke/pipermail/kictanet/attachments/20110426/4c022927/attachment.htm>