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{
    "id": 62422,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/62422/?format=api",
    "text_counter": 218,
    "type": "other",
    "speaker_name": "",
    "speaker_title": "",
    "speaker": null,
    "content": "Mr. Speaker, Sir, mobile telephony has removed the barriers of time and distance to commercial activities. Access to affordable communication has enabled millions of Kenyans to create real wealth in their businesses. This has been made possible by increasing affordability of mobile telephony services. The average core tariff was Kshs17 per minute in 2002. Today, it is Kshs3 per minute. The cost of a handset in 1997 stood as high as Kshs150,000. Today, it is as low as Kshs1,000. In 2000, airtime usage charge stood at Kshs60 per minute. Today, it is between Kshs1 to Kshs3. These factors have increased the adoption of mobile telephony technology by a greater majority of our people. Mobile penetration has grown from 15,000 users in 1999 to 24 million users in 2011, with our national penetration now standing at 60 per cent. Mr. Speaker, Sir, let me turn to the issue of price wars amongst the four operators. In doing so, allow me to first distinguish between market segments that are regulated by market forces of supply and demand and those regulated by their dysfunctional nature have to be regulated by a regulator. A market segment is competitive if innovation and efficiency is a function of supply and demand supported by multiple players. However, in a market that exhibits natural monopoly tendencies or market failures, lack of competition, such as the wholesale mobile call termination market, incentive regulation by the regulator remains the only viable tool to eliminate barriers to competition. In the mobile telephone sector, termination is a monopoly market. The calling party pays the network of the receiving party for using the infrastructure of the later. For example, a Safaricom subscriber calling a Yu subscriber will pay the latter a termination charge for using Yu’s infrastructure. The price to be paid is not determined by market forces of supply and demand, but is set by the operators. If not regulated, this scenario leads to monopoly rate and market distortion by a dominant telephone operator. Termination charges are payable for using another operator’s infrastructure. Termination charges are not payable in respect of calls made within one network. If termination charges are high, subscribers find it expensive to call outside their network. Incentive to join another network is also limited. Competition is, therefore, curtailed. Mr. Speaker, Sir, the Communications Commission of Kenya (CCK), after a participatory expert study, developed a grind path for the gradual reduction of termination charges from Kshs442 in 2009 to Kshs221 in 2010; then to Kshs1.44 in 2011 and Kshs1.15 in 2012 and Kshs0.99 in 2013, respectively. How has the industry performed since the 50 per cent reduction of the inter- connection rates in September, 2010? I wish to table the quarterly statistics report of the CCK published in January, 2011, which illustrates the following in respect of the fourth quarter of 2010 after the reduction."
}