Kibaki and Raila’s Directives to CCK Blocking Progress in the Telecoms Sector

Posted In Business - By Tech Mtaa On Wednesday, August 29th, 2012 With 0 Comments

Mobile services subscribers will not enjoy lower call rates as Kibaki is said to be blocking the lowering of the termination rates. Through a directive to CCK, President Kibaki has stopped any lowering of the call rates.

The political interference in the communications sector as President Kibaki look at the interest of his business associates, has seen consumers in Kenya not enjoy lower cost of voice and data products as they should. This is the second time President Kibaki has intervened to make sure that mobile termination rates do not go further down.

Even the more conservative Business Daily has termed the action of the President as “political meddling.”

Mobile Termination Rate (MTR) is the cost which operator A pay operator B for calls terminating on operator B’s  network.

President Kibaki is acting on the advice and noise of only Safaricom and Orange Kenya. These actions by the President coupled by the inability of CCK to penalize operators which do not offer quality service is paid in return by the operators allowing the government a free hand to spy on individuals as well as even flout rules and regulations in the industry.

Business Daily quotes a letter from the President’s PA to Ministry of Information’s PSs, Dr Ndemo, reading;

“This office has received communication dated July 11, 2012, from your minister authorising the acting director-general of CCK to effect the new MTR before conducting a study that will bring this matter to rest. I am directed, therefore, to inform you that until an all-inclusive study of costs and other relevant issues is undertaken and forwarded to this office for His Excellency’s consideration, the status quo should remain.”

While President Kibaki was intervening on behalf of Safaricom and Orange Kenya, prime Minister Raila Odinga sent a letter to CCK directing that the regulator withdraw a notice which it published intending to revoke frequencies of broadcasters which acquired them irregularly. Raila’s directive was on behalf of Royal Media Service which cannot compete on an even playing field and so is looking for protection from its political projects.

Business Daily quote’s Raila’s letter through his PS, Mohamed Isahakia, as reading;

“The Prime Minister has directed that you immediately withdraw the notice referred to above and obey the court order referred to above. This means you do not at all interfere with any frequencies and licences issued and being used by Royal Media Services Limited as contained in your notice.”

The mobile termination rates were supposed to glide downwards after a path was settled on with all operators in agreement. Safaricom dominates the voice market while Orange Kenya has an upper hand in the data market which has not used effectively to its advantage.

The mobile termination rates (MTRs) glided from Sh4.42 in June 2009 to Sh2.21 in July 2010. A further drop to Sh 1.44 in June 2011 was expected but this was blocked through a presidential directive. CCK which is supposed to be an independent regulator is not independent at all with most of its decisions informed by the politics of the day and not the reality of the business.

Raila interference means that CCK will still not have proper control of the frequencies hindering the country’s roll-out of 4G.

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