Information industry regulator Communications Commission of Kenya CCK plans to bring down Mobile Termination Rates (MTR) to below one shilling. MTR is the amount of money an operator pays other operators when its subscribers call the other network.

The regulator announced last month that it would be bringing down the rates from the current  Sh2.21  to  Sh1.44 a minute in July. This move has strongly been opposed by the largest operator Safaricom claiming the new rates have been based on an old mode that did not factor in all cost possibilities. Safaricom had therefore asked that the commission conducts a new survey and re-c0nsider dropping the rates further.

Information Permanent secretaty Dr. Bitange Ndemo had backed Safaricom in asking for a fresh survey for the rates. Safaricom claims  that it may not fully recover the cost of receiving and terminating calls from other networks with the new rate which as a large operator, it receives many calls whose cost of handling is high.

Speaking at CCK Open Day, director in charge of competition Matano Ndaro said high termination rates discourages small players from pricing their products competitively hence hurting subscribers with high priced calling rates. Ndaro accused Safaricom of using the termination rates as a revenue pipe, which should not be the case. CCK said that Safaricom earned Sh868.9 million from the rate in the three months to December with Airtel paying out Sh544.2 million. Essar Sh192.5 million and Telkom Kenya paying Sh21.3 million.

Low termination rates are beneficial to subscribers as they would encourage competition amongst the operators resulting to cheaper calling rates and customer designed packages to enable operators stay ahead of the competition.