Airtel upbeat on CA's move to cut call rates

Airtel says it pays Safaricom about Sh300 million monthly for interconnection. [Boniface Okendo, Standard]

A day after Kenya’s leading telco Safaricom protested the regulator’s move to cut the mobile voice termination rates (MTR) and fixed termination rates (FTR), rival service provider Airtel Kenya has come out in support of the 88 per cent drop.

In a statement, Airtel Kenya said the revision by the Communications Authority of Kenya (CA) to reduce the MTR and FTR from Sh0.99 to Sh0.12 per minute is long overdue.

MTR is the rate that one operator pays a rival company to terminate calls on their network.

Airtel Kenya said the Sh0.99 per minute rate was only intended to run for a year but stretched to seven. "The MTR reduction by the CA considers the seven-year delay and is fully aligned with the interests of the consumer,” said the telco in a statement.

The telco describes the price changes as timely, saying the drop will greatly benefit consumers who will call across networks.

“Customers will also get to benefit from better services as telcos will now have more money to invest into their infrastructure and networks, as opposed to using the same money to pay high interconnection fees,” said Airtel Kenya.

Safaricom has appealed to the Communications and Multimedia Appeals Tribunal and wants the matter certified as urgent. Safaricom says CA ignored its own procedures and erred by using benchmarking methodology rather than the long-run incremental costing that has been used in previous reviews.

With the new rates, it means Airtel Kenya and Telkom Kenya will pay less to Safaricom for the interconnection of calls across networks. Airtel revealed it pays Sh300 million on average every month to Safaricom for interconnection.

The high cost for interconnection could be the reason behind Airtel Kenya campaigns that woo customers to make calls within the network with packages such as Tubonge which offer up to 100 free minutes to customers.

CA in its proposal to revise MTR and FTR that culminated in the current changes said it undertook a network cost study whose objective was to develop a new competitive interconnection rate framework that took cognizance of new developments in the communication market.

These include the introduction of the Unified Licensing Framework, licensing of two additional mobile service providers (Telkom Kenya and Essar Telecoms) and the landing of three fibre optic cables.

The new rates are expected to take effect on Saturday. Safaricom in its protest to the tribunal has described the process by which the new rates were tabulated as unreasonable and procedurally unfair.