The Communications Commission of Kenya (CCK) has distanced itself with the plan by three mobile operators to have a fixed minimum calling rate within their networks.
CCK director general Francis Wangusi has admitted having talks with Airtel, YU Mobile and Telkom Orange but said that no official request had been made by the three operators to have the rates fixed.
Wangusi noted that retail price fixing in mobile telephony would be a breach to the competition law and policy because it discourages competition. The four operators have intentions of setting a uniform calling rate of Shs 4 which leading operator Safaricom has viewed in bad taste.
The interconnection charges had fallen from Sh4.42 in June 2009 to Sh2.21 in July 2010 and were to drop to Sh1.40 last June, but President Mwai Kibaki froze the rates for one year following lobbying from Safaricom and Orange. (Business Daily). The drop in interconnection charges resulted to the price wars amongst the four operators which saw them report significant losses, with Safaricom reporting a profit drop of 47.4 % to Sh4 billion for the six months ended September.
Airtel, YU Mobile and Orange all charge a flat rate of Shs 3 across all networks with varying on-net rates for each operator.
Consumers benefited greatly by the price wars with some operators dropping call rates per minute to as low as 50cents in 2010. Safaricom however moved out of the war to set on-net calling rates at Shs 4 and Off-net calls at Shs 5, a move industry regulator CCK noted in a recent report as the cause for drop in voice traffic.