Telkom Kenya claims it is forced to pay half of its revenues to Safaricom and other rival operators due to high rates for ending customer calls on their network, rendering the country a loss-making territory for the operator.
Telkom revealed this information at a tribunal hearing in which Safaricom filed a legal challenge against the Communications Authority of Kenya (CA) for decreasing mobile termination rates (MTRs) and fixed voice termination rates (FTRs) in the country, according to BMA Sources.
Telkom Kenya said it couldn’t compete because of the country’s high mobile termination rates (MTRs) and fixed voice termination rates (FTRs). MTRs and FTRs are fees a telecommunications provider charges to another for terminating calls on their network.
The authority reduced MTR and FTR fee rates from US$ 0,0087 per minute to US$ 0,0011 after a six-year freeze.
Due to its overwhelming voice market share of roughly 68.9 per cent, Safaricom had an issue with the above mentioned being the largest operator and earning the most income from MTRs, according to BMA Sources.
According to Telkom Kenya, the cut will increase competition in Kenyan markets and provide customers with cheaper calling rates. In this case, the operator and rival Airtel are supporting the CA.
At the tribunal hearing, Stellar Wawira, Telkom Kenya’s head of public policy and regulatory affairs, said that “Telkom has previously raised concerns that over 50 per cent of its mobile communications revenue is being paid to other telecommunications operators in settling expenses associated with MTRs and FTRs costs.”
“I believe the CA’s determination to lower MTR and FTR costs is in the best interests of the consumers whom the CA has an obligation to protect.”