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<p class=MsoNormal style='background:#0070C0'><b><span style='font-size:
26.0pt;color:white'> PRESS RELEASE<o:p></o:p></span></b></p>
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<p class=MsoNormal><span lang=EN-GB style='font-family:"Arial","sans-serif";
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<p class=MsoNormal><span lang=EN-GB style='font-family:"Arial","sans-serif";
text-transform:uppercase'><o:p> </o:p></span></p>
<p class=MsoNormal><b><span style='font-size:12.0pt'>23rd April 2012 <o:p></o:p></span></b></p>
<p class=MsoNormal><b><span style='font-size:12.0pt'><o:p> </o:p></span></b></p>
<p class=MsoNormal><b><span style='font-size:12.0pt'>Listers<o:p></o:p></span></b></p>
<p class=MsoNormal><b><span style='font-size:12.0pt'> <o:p></o:p></span></b></p>
<div style='border:none;border-bottom:double windowtext 4.5pt;padding:0in 0in 1.0pt 0in'>
<p class=MsoNormal><b><span style='font-size:12.0pt'>CCK’s response to media
reports on alleged collusion to fix retail mobile voice prices <o:p></o:p></span></b></p>
</div>
<p class=MsoNormal style='text-align:justify'><span style='font-size:12.0pt'><o:p> </o:p></span></p>
<p class=MsoNormal style='text-align:justify;text-justify:kashida;text-kashida:
0%'><span style='font-size:12.0pt'>The attention of the Communications
Commission of Kenya (CCK) has been drawn to media reports alleging</span><span
style='font-size:12.0pt;font-family:"Garamond","serif"'> </span><span
style='font-size:12.0pt'>a plan to fix retail voice tariffs by a section of the
mobile service providers ostensibly with tacit approval of CCK. The CCK wishes
to state as follows:<o:p></o:p></span></p>
<p class=MsoNormal style='text-align:justify;text-justify:kashida;text-kashida:
0%'><span style='font-size:12.0pt'><o:p> </o:p></span></p>
<p class=MsoListParagraph><![if !supportLists]><span style='mso-list:Ignore'>1.<span
style='font:7.0pt "Times New Roman"'> </span></span><![endif]>CCK
considers the retail mobile voice market as sufficiently competitive, thus
making it unnecessary to impose any stringent retail price regulatory
obligations on the licensed mobile operators. However, even for such
competitive market segments where the Commission does not impose retail price
setting obligations, the law (i.e. clause 4(3) of the <i>Kenya Information and
Communications (Tariff) Regulations, </i>2010,) prohibits licensees from
applying tariffs that distort competition, exploit consumers and, possibly even
prevent market entry. <o:p></o:p></p>
<p class=MsoListParagraph><![if !supportLists]><span style='mso-list:Ignore'>2.<span
style='font:7.0pt "Times New Roman"'> </span></span><![endif]>Therefore,
all mobile operators set their retail prices independently guided primarily by
their costs of providing a particular service and are only obligated to file
with the Commission their retail rates as provided for in their respective
licences. <o:p></o:p></p>
<p class=MsoListParagraph><![if !supportLists]><span style='mso-list:Ignore'>3.<span
style='font:7.0pt "Times New Roman"'> </span></span><![endif]>While
the CCK recently held discussions with some licensees regarding the wholesale
interconnection rate and the attendant glide path, no request has been
officially made regarding the intention to fix the retail mobile voice tariff
either by those players on any other licensee. As such, no such approval has
been granted.<o:p></o:p></p>
<p class=MsoListParagraph><![if !supportLists]><span style='mso-list:Ignore'>4.<span
style='font:7.0pt "Times New Roman"'> </span></span><![endif]>Retail
price fixing as practiced in collusive oligopoly markets is an anti-competitive
business practice that is contrary to the prevailing competition law and
policy. Retail price fixing in the mobile voice market in Kenya would,
therefore, be in breach of the law; and as such no approval can be granted.<o:p></o:p></p>
<p class=MsoListParagraph><![if !supportLists]><span style='mso-list:Ignore'>5.<span
style='font:7.0pt "Times New Roman"'> </span></span><![endif]>The
Commission is currently carrying out a study to evaluate the impact of
competition on the mobile voice market on the entire economy. We would
like to clarify that the study, which is being undertaken by the Kenya
Institute of Public Policy Research and Analysis (KIPPRA), is in not in any way
meant to determine interconnection rates for the mobile telecoms market. <o:p></o:p></p>
<p class=MsoListParagraph style='mso-list:none'>Issued by<o:p></o:p></p>
<p class=MsoNormal style='text-align:justify'><b><span style='font-size:12.0pt'>Francis
W. Wangusi<o:p></o:p></span></b></p>
<p class=MsoNormal style='text-align:justify'><b><u><span style='font-size:
12.0pt'>Ag. Director-General <o:p></o:p></span></u></b></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";
color:windowtext'><o:p> </o:p></span></p>
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