Sunday, March 26, 2023

Telkom’s response to the Communications Authority’s review of Interconnection Rates

Telkom’s response to the Communications Authority’s review of Interconnection Rates

Technology solutions: Voice, Data, and Financial services, are now emerging as a daily necessity. With the pandemic, these services are what have kept the global engine moving with a heavier reliance on remote work, online communications, entertainment, as well as virtual transactions.

Telkom welcomes the Communications Authority’s review of the Mobile Termination Rates (MTRs) and Fixed Termination Rates (FTRs) from KSh. 0.99 to KSh. 0.12. This review is quite timely and is a progressive step towards making voice services more affordable and accessible to Kenyans.

Globally, big and dominant players or incumbents in mobile telephony markets have had a pricing advantage due to the imbalance of connecting traffic between themselves and other network operators.

Higher MTRs and FTRs also have the potential to negatively impact the consumer if these larger operators are to price discriminate between on-net and off-net calls. This could lead to the creation of a “club effect” where customers of the larger operators are offered attractive price incentives (that are not affected by the MTRs and FTRs) to stay on the network.

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Consequently, “new” customers could also feel compelled to join the larger operator’s network, which has a higher number of subscribers, to keep their voice call costs low, due to lower on-net rates compared to the high off-net pricing were they to join an alternative network. This would in the end stifle competition and deny customers of choice.

Today’s customer demands more competitive and comprehensive products that address their different and ever-changing needs. At Telkom, we hold firm the conviction that access to Mobile Voice and Data services is a fundamental human right.

We continue to develop new and competitively priced products and solutions such as Madaraka Life in response to these customer dynamics and we are putting in even more investment into our digital financial service T-kash and our network infrastructure, consequently enabling more people to access technology services.

The affordability of handsets, however, which allow the consumer to access these mobile services, remains a challenge to getting more Kenyans connected. There is still need for further intervention from all concerned regulators with the support of other sector stakeholders, to expedite the implementation of policy frameworks to lower this barrier.

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