CCK Statement on Determination of SMS Termination Rates

The Communications Commission of Kenya (CCK) has issued an addendum to the Interconnection Determination No. 2 of 2010 on Short Message Service (SMS) Interconnection termination rates. Mobile service operators are now required to immediately implement lower SMS termination rates with effect from 1st January 2011.  The operators are expected to interconnect at Ksh.0.60 per SMS and reduce progressively to Ksh0.05 by the year 2013, according to the prescribed glide path.

The Determination No.2 of 2010, which was issued on 16th August 2010, noted that the prevailing wholesale termination rates for mobile SMS were way above the incremental costs of providing these services across networks.  This was established through the Review of the Network Cost Study carried out by the Commission in collaboration with Analysys Mason in 2010.

The Study objectively established that the incremental cost of offering mobile SMS termination services for an efficient operator in Kenya was Ksh0.015 per SMS while the prevailing negotiated termination rate among operators was Ksh2.00 per SMS. Given this large discrepancy, the study recommended negotiation of lower mobile SMS termination rates by the operators within a period of three months.  The period lapsed on 16th November 2010 by which time, the operators had not reached an agreement on new SMS termination rates.

As the industry regulator, CCK is mandated to among others, promote the development of a competitive telecommunications sector in the country. The Commission’s intervention in this respect is intended to provide guidance to the sector and ensure that the Kenyan consumers enjoy more services at reasonable prices.