CCK happy with lower calling rates in Kenya

August 25, 2010
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, NAIROBI, Kenya, Aug 25 – The Communications Commission of Kenya (CCK) has expressed satisfaction with the ongoing efforts in the telecommunications sector to lower call charges in line with recently issued guidelines.

CCK Director General Charles Njoroge told Capital Business on Wednesday that the reaction to capping interconnection rates at Sh2.21 was the right step towards ensuring a level playing field for all operators and at the same time guaranteeing benefits to consumers.

“I’m very happy with what is happening. They have responded by passing on the benefits to the consumers. I think that the most important thing is that if they are able to make savings, then they should be able to pass that on,” he said.

The four mobile phone operators have revised their rates to between Sh2 and Sh5 for both calls made within and outside their networks. For some, the tariffs are promotional offers and not permanent rates.

The DG however said they are not worried that the firms will revert to their old and higher rates as all of them have to comply with the set guidelines and also file their rates with the regulator. Again, subscribers now have many choices and it therefore will be a race for the operators to ensure they come up with measures to retain their customers.

But even with the new rates, the market is still witnessing an attempt by the firms to try and lock-in their subscribers. This is done by for example making it expensive to call outside the network and cheaper to make on net calls.

The CCK has some more measures up its sleeves which upon implementation will get rid of the ‘club effect’ and ensure a robust and competitive telecoms market.

This will be through the implementation of the Kenya Information and Communication Regulations of 2010 which among other things ensures that an operator does not abuse its dominance at the expense of the others.

“You cannot eliminate ‘club-effect’ by looking at the prices alone. There are other factors that we are going to apply in the market such as the issue of SMS, the regulations which define the issue of dominance and we will be able to move in with the price cap,” the DG added.

Some of these measures will be implemented in the next three months as the commission moves to ensure that all anti-competitive tactics are dealt with in totality and have been informed by findings of a recent study on the assessment of competition in the sector.

There have been fears that the CCK’s decision to regulate the prices in the market might curtail the growth of the telecoms sector, which has in the last few years recorded an explosive development.

Mr Njoroge however sought to calm those fears saying instead its measures will spur growth, ensure that consumers are able to enjoy greater choice and better services and guarantee better returns on investments for the operators.

“As you price-regulate, it doesn’t mean that you are going to restrict the market. If you look at the Asian countries the prices are very low, yet they are able to connect a million people a day,” he explained.

With this development, the next level of competition will now shift to quality of the network, value added services or innovative products and services which should see a faster growth of the market.

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