Win for Safaricom in national roaming fees tussle

In this file picture, engineers assemble the base transmission station at Jaramogi Oginga Odinga University in Bondo.

The rates telcos charge rival operators to connect their subscribers in areas where they lack service coverage in Kenya should be negotiated commercially, a study by the communications regulator has shown, handing a boost to Safaricom which has the largest network spread countrywide, and tower operators.

This concept known as national roaming or network roaming occurs when traffic from one operator’s subscriber is carried and routed on another operator’s network.

This only requires an agreement between operators, including service fees, and is popular, especially in areas of low density where investments in several competing sets of infrastructure may not be viable.

Some smaller telcos including Airtel Kenya, Telkom, and Jamii had petitioned the Communications Authority of Kenya (CA) to impose controls on the amount of fee charged on national roaming services — a demand that was mainly targeted at Safaricom with more than 5,000 sites.

The CA study however rejected the proposal and said national roaming fees in Kenya should track the common global practice where most agreements are commercially negotiated.

Roaming fee controls

“We propose that roaming be supported in Kenya and in line with international best practice described in which roaming is time and geographically limited. We do not recommend imposing charge controls,” consultants said in a report from the CA study said.

Kenya Communications Regulations 2001 provide require that all licensees enter into reciprocal agreements with any licensed party who requests roaming services.

Safaricom has opposed national roaming fee controls arguing that it would discourage innovation, competition, and the further development of the tower company market.

The CA study concurred with Safaricom’s concerns and also pointed out that while roaming can be useful and cost-effective for smaller market players in the short run, roaming operators will always have a lower degree of coverage in the long run.

Roaming agreements

“There are benefits to smaller market participants in the short run but this not a sustainable solution. This opinion supports limiting roaming for entrants to a period of time” the CA report said.

The CA study proposed that national roaming should be supported in Kenya where it assists with new entry or coverage in remote areas. Accordingly, any roaming agreements should be limited by time and geography.

“We recommend that active network sharing and roaming be made a requirement in relation to future universal service site subsidy processes that the Authority implements, where the Authority implements, where the successful bidder rolls our active network equipment,” the study said.

“Where roaming is required and is requested in a manner that is consistent with time and geographic limitations, we propose that the Authority monitors that there is no constructive refusal to supply or margin squeeze” it added.

The CA study said that to comply with this, all roaming agreements should be filed with the Authority and roaming providers should file quarterly reports on the locations, traffic volumes, and prices charged for roaming charges.

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