Safaricom has a huge pricing power in voice services, making it difficult for rivals Airtel Kenya and Telkom Kenya to compete with it, the Communications Authority of Kenya (CA) has said.
The regulator made the disclosure in its response to a case filed by Safaricom at the Communications And Multimedia Appeals Tribunal seeking to stop CA from cutting the mobile termination rate (MTR) per minute to Sh0.12 from Sh0.99.
MTRs are the charges levied by a mobile service provider on other telecommunications service providers for terminating calls on its network.
Safaricom argues that the reduction of the charge, which was to take effect at the start of this year, ignores the cost of doing business in the telecommunications industry.
The regulator responded by stating that the leading telco has the lowest cost of operations, allowing it to run promotions at prices below the MTR and which its rivals are not in a position to match.
Safaricom’s leading market share has seen it charge its rivals more than it pays out to them, leaving it in a net profitable position.