WHY CA WANTS SAFARICOM’S APPEAL ON MTR DISMISSED.

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Communication Authority of Kenya Director General Ezra Chiloba./PHOTO BY S.A.N

BY SAM ALFAN.

Communication Authority of Kenya wants an Appeal by Safaricom challenging the decision to reduce mobile termination rates dismissed arguing that views from all stakeholders were taken into account.

The CA Director General Ezra Chiloba argued that the reduction was determined after the necessary procedure and substantive consideration.

Chiloba wants Safaricom appeal dismissed with cost arguing that the impugned MTR’s were determined after the necessary procedure and substantive consideration.

CA through veteran lawyer Wambua Kilonzo, argues that granting relief sought by the Safaricom would unjustifiably fetter the discretion of it granted section 5A of KICA in the exercise of its powers, performance of its functions and objectives of the Tariff regulations.

MTRs are the charges levied by a mobile service provider on other telecommunications service providers for terminating calls in its network.

The CA cut the charge to Sh0.12 per minute from the current Sh0.99 per minute after a six-year freeze.

Safaricom that earns the most from MTR due to its large voice market share of 68.9 percent, challenged the move before the Multimedia Appeals Tribunal. The capping was to start on January 1

CA through veteran lawyer Wambua Kilonzo, argues that granting relief sought by the Safaricom would unjustifiably fetter the discretion of it granted section 5A of KICA in the exercise of its powers, performance of its functions and objectives of the Tariff regulations.

The communication Regulator told the Tribunal that upon requisite public participation, it retains the discretion to ultimately determines the methodology to adopt in reviewing MRTs and FTRs.

“This is consistent with the provisions of section 5A of the KICA that, the CA shall be independent and free of control by government, political or commercial interests in the exercise of its powers, performance of its powers and in the performance of its functions “, lawyer Kilonzo submitted before Tribunal.

Lawyer Kilonzo further told the Tribunal that, Safaricom has not demonstrated the extent to which, if any, that it is not able to recoup its incremental costs for interconnection with other.

“In fact, it has demonstrated that in the years 2020 and 2021, even with the current interconnection rate of Sh0. 99, Safaricom successfully ran a number of promotions and special offers targeting voice services where the effective discounted rate per minute for both on-net and off-net calls is as low as Sh0. 2”, CA told the Tribunal.

The CA dismissed Safaricom argument saying that the impugned MTRs and FTRs promote effective competition and Safaricom has not demonstrated the contrary.

Tribunal heard that from its analysis of stakeholder impact, it was concluded that the lower the voice termination rates would facilitate great retail price flexibility which would facilitate in the overall price levels for mobile services to the benefit of consumers. On the impact on the industry players, CA determined that the proposed revisions would lead to reduced net transfers occasioned by the current imbalanced.

CA’s added that Safaricom enjoys economies of scale and their costs are low compared to other small operators and proposed low termination rate will give small operators greater price flexibility to compete with safaricom.

CA also analyzed the potential impact of the reduction in MTRs on the revenues of three MNOs in Kenya, Safaricom, Airtel and Telkom Kenya ltd using voice traffic patterns for the quarter ended June 30,2021.

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