Telkom wants call termination rates rise

February 21, 2012
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Telkom Kenya boss Mickael Ghoissen/FILE

, NAIROBI, Kenya, Feb 21 – Telkom Kenya now wants the Communications Commission of Kenya (CCK) to review Mobile Termination Rates (MTR) upwards despite the regulator’s indication to lower the rates even further.

Telkom Kenya Chief Executive Officer Mickael Ghossein says operators have struggled to remain afloat and operate at profit levels since the government cut call rates by more than 50 per cent in August 2010. The MTR which telecom operators charge their rivals for handling their calls dropped to Sh2.21 from Sh4.42.

“We will address an official letter in the coming days to CCK to review the Mobile Termination Rates and even increase it. What we are asking the regulator is that operators cannot go under twice the MTR,” he asserted.

Ghossein said expansion plans by the company will be crippled further if CCK lowers the rates again, pointing out that Telkom’s capital expenditure has been heavily impacted by frequency fees and technology maintenance.

As part of its efforts to boost profits, Telkom Kenya is on an aggressive campaign to increase its market share this year from the current 10.8 percent to 11.2 percent through building its data business.

“The data will make business grow because if you increase the data by 10 percent you could increase GDP by two or three percent for the country, so we are pushing this strategy,” Ghossein said.

Telkom currently has 2.8 million subscribers, which Ghossein said has been a challenge to retain especially with customers owning multiple SIM cards from various networks.

Cable cuts derived from road construction and theft have also been a major roadblock for the operator as it moves towards growing its data offerings.

“Last year we had 30 incidents a month and now we have 50 per month, it has become a nightmare for the company. The fibre cuts impact the network,” he said.

The company has the largest fibre infrastructure footprint within Kenya with over 4,400 terrestrial running across the country through its shareholding in both the TEAMs and EaSSy submarine cables.

Data revenue in Kenya generated by all mobile operators was estimated to be $457 million for 2011 according to a study released by Pyramid Research.

The study projected that by 2016 data revenues could hit $751 million dollars which will be a 44 per cent share of total telecom revenue.

Telkom also launched an additional bonus to its loyalty programme, Orange Ziada that allows the customer to maximize on the services they use most.

Dubbed the Angukia bonus programme, Orange customers will be able to access various bonus options according to their usage patterns.

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