Why Kenyans still face high call costs

April 9, 2010

, NAIROBI, Kenya, Apr 9 – Minimal competition in the telecommunications sector is being touted as the major contributor to high call rates.

Communications Commission of Kenya (CCK) Director General Joseph Njoroge said on Friday that the competition amongst mobile operators has not taken full effect in Kenya

Mr Njoroge said that although prices have slowly been dropping, they were still not at acceptable levels.

“When the competition is not perfect, you will always find that prices are always not acceptable to consumers,” Mr Njoroge said.

He said it was important for the regulator to constantly evaluate the market to establish whether there was need for intervention.

“We have to be careful that we do not stifle of the market, however we will provide necessary guidelines as and when necessary,” he said.

While intra-network charges have continued to drop as service providers battle on call pricing, cross-network charges have remained high. This is despite CCK’s efforts to lower the cost by slashing its interconnection charge by 16.1 percent from Sh5.27 to Sh4.42 in 2009.

Mobile phone operators have however been slow to take up the initiative. To keep costs down subscribers have been forced to buy more than one SIM card to side-step the high costs and make affordable calls.

Mr Njoroge said one-way of dealing with the challenge was employing service provider number portability, where subscribers will be able to keep one line and migrate to any network while keeping their number.

“We hope that by June/July we will have finalised the implementation of number portability and we expect Kenyans will be able to enjoy the services, prices and quality,” he said.

He was speaking during the opening of an inception workshop on network cost study with industry player with a view to reviewing and updating the cost studies.

The new guidelines are expected in June and will offer guidelines to players on what to charge subscribers.

At the same time, CCK is planning to engage the government on a controversial proposal to introduce a new mobile phone airtime levy.

A technical paper prepared by the Treasury proposes a two percent tax introduced on mobile phone airtime with the funds being channeled towards the fight of HIV and AIDS.

“We need to discuss this with the government because ultimately any new tax would be passed on to the consumer,” he said.

CCK wants to raise concerns with the Treasury over the proposal to use the telecoms industry to finance other sectors saying: “if there is any levy to pay then it should be ploughed back to the sector to develop it further.”

In its place, CCK wants the implementation of the universal service fund, which is more in tune with the needs in the sector.


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