Safaricom has agreed to pay Sh1.5 billion in tariffs.
- Published By Dickens Omollo For The Statesman Digital
- 1 year ago
Despite an agreement with rival mobile telcos to implement a smaller cut in Mobile Termination Rates (MTR) than previously ordered by the industry regulator, the Communications Authority of Kenya, Safaricom is expected to lose about Sh1.5 billion in revenue per year (CA).
MTRs are fees that a mobile service provider charges other telcos for terminating calls on its network.
Safaricom, Airtel, Telkom, and Jamii Telecommunications reached an agreement before the Communications and Multimedia Appeals Commission on Thursday to reduce the Fixed Termination Rate (FTR) from Sh0.99 to Sh0.58.
The new rate will be in effect for one year before the CA announces the substantive rate.
"The current MTR and FTR be reduced from Sh0.99 to Sh0.58 as an interim rate." "The revised interim rate will be in effect for a period of 12 months beginning August 1, 2022," according to the tribunal consent.
"Upon completion of the Network Cost Study, the authority will implement a new MTR and FTR without undue delay."
The new rate will be in effect for one year before the CA announces the substantive rate.
Based on Safaricom's average earnings of Sh3.5 billion under the Sh0.99 MTR and FTR rates, the new Sh0.58 rate will cost the telco nearly Sh1.5 billion in the fiscal year ending August 2023.
However, Airtel and Telkom, which were the biggest victims of the old rate, will save Sh1.4 billion and Sh190.5 million in MTR and FTR costs, respectively, over the course of the year.
The Ministry of Information and Communication Technology (ICT) has also taken up Safaricom's cause, accusing the telco of advocating for a system that penalizes competitors and pocketing more than seven times its fair share of MTR and FTR rates.
Airtel, Telkom, and Jamii telecommunications argued that lowering the rates would make voice services more affordable and accessible to Kenyans.
Share on
SHARE YOUR COMMENT
MORE STORIES FOR YOU
Trending Stories
DJ Mo’s former illicit lo...
- Published By Jane
- January 15, 2024
Mapenzi! Zari and Tanasha...
- Published By Jane
- October 24, 2023
Zuchu Speaks on Diamond P...
- Published By Jane
- October 12, 2023
Hio Ni Upumbavu Wasituche...
- Published By Jane
- November 8, 2023
RECOMMENDED FOR YOU
WhatsApp sets 13 years as...
- Published By Jedida
- February 21, 2024
Five healthy and affordab...
- Published By Jane
- February 24, 2024
12 fashion tips that can...
- Published By Jane
- February 22, 2024
How to Store and Handle G...
- Published By Jane
- February 22, 2024
Latest Stories
Haiti gang leader Jimmy C...
- Published By Jedida
- April 26, 2024
Ministry of Education say...
- Published By Jedida
- April 26, 2024
KeNHA cautions motorist u...
- Published By Jedida
- April 26, 2024
Tanzania's Minister of Ag...
- Published By Jedida
- April 26, 2024