[kictanet] Voice charges to fall further with revised rates

[robert yawe]

Hi listers,

Thought of reviving this old thread especially now in view of the expected 
increases in fuel prices next week that are as a result of the hyped price 
control formula.

If we where to zero rate the mobile interconnection charges what is likely to be 
the effect?  

We praised the government for coming up with the fuel price control formula 
which is now, literally, eating us alive, if we allow the same civil servants 
who formulated the fuel formula to formulate a similar one for voice calls and 
with time data rates then we might as well say goodbye to the 1/- and 3/- 
tariffs.

When the issue of dropping calling rates first reared its ugly head I indicated 
that the governments revenue collection mechanism uses what is called a zero sum 
methodology, as even the Prime Minister reiterated, as he declared a drop in the 
prices of fuel, that the revenues not collected from fuel will be collected from 
somewhere else.  The moneys not collected from us through airtime will still be 
collected.

The government, like the all mighty God gives with one hand and takes with the 
other, lets hope that sanity is restored and no one person tries to zero 
rate the interconnection charges.

Have a running weekend

Regards


 Robert Yawe
KAY System Technologies Ltd
Phoenix House, 6th Floor
P O Box 55806 Nairobi, 00200
Kenya


Tel: +254722511225, +254202010696




________________________________
From: Eng. Wainaina Mungai <wainaina.mungai at gmail.com>
To: robertyawe at yahoo.co.uk
Cc: KICTAnet ICT Policy Discussions <kictanet at lists.kictanet.or.ke>
Sent: Tue, 26 April, 2011 21:53:56
Subject: [kictanet] Fwd: Voice charges to fall further with revised rates


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
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