Mobile Tariffs: What Next?

Interconnection as the name suggests, refers to the arrangements between networks providers covering reciprocal acceptance of voice and data traffic among themselves. Interconnection "costs" are passed to the consumers.

Communications has been costly to users not because the actual cost of providing the service is high but because network owners deliberately keep interconnection rates high to “encourage” their subscribers to call and remain within their network and to retain dominance.

Analysis Consulting of UK together with McCarthy Tétrault last Friday presented their draft final telecommunications (voice) “retail and interconnection study” findings and recommendations to service providers steakholders at the Kenya College of Communications Technologies last Friday.

Inviting any substantive comments by Friday 26 January 2007, the consultants explained the study Initially expected to be completed over 6 month period was delayed by the interconnect dispute between Telkom and Safaricom mid-stream.

"Googling" Analysis Consulting before going to KCCT that returned many reputable institutions, governments and agencies certainly boosted confidence in their study findings considering that many past "experts" have come up with all manner of recommendations.

Dominant telecommunication providers (“dominant” being the new phrase describing emerging private monopolies in Kenya), safely avoids highlighting some of these networks openly stated opposition to the introduction of more players. Some of these dominant networks appear to believe that they “own” consumers on their networks, and lowering tariffs is their discretionary "favour" to subscribers.

But it should no be misconstrued that it was a favour from any GSM company to invest in telcom in Kenya. It continues to make business sense therefore seeking consumers understanding of their continued super profits does not hold much water.

Official support, “they need to recoup on their investment and expand their networks” is not very helpful to consumers much either especially while on the other hand they are fighting the introduction of more player “tooth-and-nail” as it were reported in the media defeating free market demand and supply principle.

Consumers need to severally replay every official pronouncement on this subject to know who is for, and against them.

Now, realising that the era of fixing high interconnection rates has come to an end, now they are resorting to handset offers that lock consumers to their network. This strategy takes away mobile phone user option of replacing their SIM card to enjoy a better offer a competitor may offer and also aimed at giving them a free hand at perpetually charge whatever tariffs they like within their network.

Even if offered for free, consumers should test if such handsets work with alternative networks SIM cards before succumbing to the tempting offers on their face value for they may be very costly in the long run.

Interconnection cost of shillings 8.20 per minute is charged to the consumer above the normal tariffs whenever they call that other network. If it is any consolation, this rate was shillings 23 per minute in 1999.

I re-confirm that there is no love lost between ICT Consumers Association of Kenya and them.

Meanwhile the GSM duopolist’ subscriptions numbers from January to November 2006 were as follows: -

GSM Subscribers Official Data (January - November 2006)

	Postpaid		Prepaid
	Safaricom	Celtel	Safaricom	Celtel
Month
January	65,115	23,508	3,560,216	1,860,094
February	67,955	24,335	3,717,098	1,920,113
March	70,794	24,937	3,883,348	1,999,011
April	72,428	25,630	3,965,825	2,078,883
May	74351	26,586	4,077,992	2,162,076
June	76,787	28,377	4,257,230	2,122,397
July	78,165	29,572	4,321,410	2,045,216
August	81,460	31,271	4,475,087	1,820,886
September	83,546	32,548	4,565,447	1,743,333
October	86,509	32,962	4,694,169	1,713,401
November	88,422	34,860	5,017,890	1,755,222
December

**December subscriptions are expected to be significantly different considering media reports of millions subscriptions following specials offers from rivalling networks.

One of the study recommendations proposes an active subscriber be redefined as “one who has used their line in the last 90 days” perhaps to correct networks’ misrepresentations of subscriber number as a sales gimmick.

Among the unanswered questions include: -

· Where and when do seven million mobile phones ring?

· When will we have at least five operators?

· Why is Telkom slow in rolling out and aggressively marketing their CDMA?

· Is it fair for KRA to award any company for paying taxes being legal obligations?

· Could telecommunication companies’ breakdown their CSR programs and expenditures?

· Will there come a time when customer care calls will get answered?

The Minister for Information and Communications is expected to make new rules based on the recommendations. You should make your contribution to ensure the Minister does not forget consumers plight - it has happened in the past.

If there existed an "open access" national fibre backbone cable, this whole exercise would not have been necessary because all current and future providers could connect to it infrastructure at pre-determined rates.

Thus, any provider opposed to this cable prefers the current status quo be maintained and they can continue pocketing "interconnection costs" profits.

Relevant documents should be available from the Commission website http://www.cck.go.ke/

Happy New Year Kenya

[DAILY NATION]
COMMENTARY

In comes 2007, with new ‘breed’ of politicians

Story by MUTUMA MATHIU
Publication Date: 12/31/2006

Good morning ladies and gentlemen, please welcome to the captive state of Kenya.

If the Islamists in Somalia were to invade the sacred soil of our homeland, or the Norwegians or Martians or Neptunians or any other group of foreigners were to invade us and impose their rule, we wouldn’t be any more of an occupied territory than we are today.

We are captive, not to a foreign power, but to our own brothers, sisters, fathers, (a few) mothers, uncles and aunties. We are the captives of a class, the political class.

In 2002, we were “liberated”, just like Iraq was, by President Mwai Kibaki and the National Rainbow Coalition from the yoke of Mr Moi, Mr Nicholas Biwott, Mr Henry Kosgey, Mr Uhuru Kenyatta, Mr William Ruto and many other gentlemen of the same water.

A few months earlier, Mr Moi was ruling with the aid of Mr Raila Odinga, Mr Kalonzo Musyoka, Prof George Saitoti and a houseful of similar gentlemen. As you well know, Mr Odinga led Prof Saitoti, Mr Musyoka and a battalion of similar gentlemen in aiding Mr Kibaki in his liberation of our good selves.

Today, Mr Odinga is leading a strong force to liberate us from Mr Kibaki. The force includes Mr Musyoka, Mr Kenyatta and Mr Ruto and has unsuccessfully tried to enlist Mr Moi’s support in the process. Mr Moi, it would appear, may have chosen to stand with President Kibaki, the man who liberated us from him.

You could do a screenplay and win an Oscar without breaking a sweat.

In a matter of hours we will be in a year that causes palpitations right from the Governor’s Mansion on the hill to the humblest council in the bush. It’s the year of the election.

The mighty and the humble will be equal, if only for a few days, as politicians who regard themselves as some of the toughest people on earth get down on their knees (as it were) in hamlets, villages and slums where people defecate in their houses, to ask for votes.

This is the year that politicians reaffirm their commitment to their tribes in night meetings and confirm their commitment to Kenya in the light of day.

Those who had changed their numbers dust up old sim cards, call up the loyal old friends they shafted in January 2003 and flatter the market women whose smell they couldn’t stand for four years.

Politicians, who by their very construction are incapable of keeping a true friend and wouldn’t recognise loyalty if you shoved it up their nose, will suddenly be surrounded by a retinue of village failures, gritting their teeth and drinking warm beer with every description of low life.

They will eat mashed rice and watery stew at church functions — and probably have their stomachs pumped later — and attend so many funerals that by the end of the year they will be smelling of formaldehyde.

Editors, whose calls ministers might not take under normal circumstances, will have their butts kissed in an effort to pass off garbage propaganda as news.

The corruptible will be offered small handouts, others will be co-opted into “think tanks” for politicians from their tribes. Of course no politician takes the advice of the so-called think tanks, they use them as a method of buying loyalty by making people feel needed, wanted, important, consulted.

Politicians will read statements at press conferences, setting out their “vision”. The statements will have been written by other people. Little or no research will have gone into these “visions” and if they were to be implemented the country would probably explode. But they are not for implementation, they are for reading at press conferences.

The Constitution will regain its importance. We will be informed that we, the Kenyan people, have demanded that the document be turned upside down in accordance with the Bomas this or that, that our salvation lies with the politicians demanding constitutional change at rallies; that the Constitution needs to be cut to whittle down the powers of the imperial presidency, create semi-autonomous enclaves, probably ruled by relatives of the victorious political grouping and out of which the Kikuyu, or some other tribe, will probably be asked to leave.

Around August, out will come the manifestos, most of them the tepid work of ageing and unenthusiastic leftists, others cut-and-pastes from the Internet. Yet others will be an attempt to re-live the Kenyatta years and Sessional Paper No 10 of 1965. You will comb the manifestos for a single, miserable new idea and you wouldn’t find it.

Come December 29, 2007, I and a couple million others will stand in line and vote for “liberation”. The subsequent Cabinet list will likely read like the one read by Mr Moi soon after he won re-election in 1992. We will dance in the streets and write eloquent editorials about “a new beginning”; a captive nation will rise and roar approval to its captor.

Happy New Year. Drive carefully — and slowly if you can — and if you drink, hitch a ride, if your driver is behaving like a fool, please tell him so.

Don’t pay a bribe, don’t take one and if you have ever bribed me, please let me know. I will put your cheque in the mail, with specific instructions where to put your money in future.