Reuters: Financial Services and Real Estate: Kenya to cut mobile termination rates - paper

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Kenya to cut mobile termination rates - paper May 2nd 2012, 08:34 Wed May 2, 2012 4:34am EDT * To cut rate by 35 percent - paper * Previous cut spurred price war NAIROBI May 2 (Reuters) - Kenya's telecoms regulator plans to cut the rate mobile phone operators charge each other for calls made across networks by 35 percent in July, a local newspaper reported on Wednesday. Business Daily quoted Francis Wangusi, acting director general for the Communications Commission on Kenya, saying the mobile termination rate will fall to 1.44 shillings ($0.02) per minute from 2.21 shillings. "We have done a study internally that actually shows the lower rates had positive impact to the larger economy and I am just waiting to get a nod from the CCK board to lower the rates to 1.44 shillings in July," Wangusi told the paper. A previous cut in the MTR in 2010 from 4.42 shillings sparked a price war. While the mobile termination rate had been expected to fall gradually to as low as 0.90 shilling by next year, President Mwai Kibaki stopped further cuts last year after operators said their business was under threat from sliding revenues. The gradual reduction was expected to help firms cut tariffs. Operators include Indian group Bharti Airtel, Safaricom, France Telecom's Telkom Kenya under the Orange brand, and Yu, run by Essar Telecom Kenya, itself a unit of Indian conglomerate Essar Group. Mobile phone subscribers grew 12.5 percent to 28.1 million in the final quarter of last year. Internet users nearly doubled to 17.4 million in the period, thanks to an increase in mobile phone subscriptions, the industry regulator said. ($1 = 83.2500 Kenyan shillings) (Reporting by George Obulutsa; Editing by Dan Lalor) Link this Share this Digg this Email Reprints

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