The Ethiopian Communications Authority (ECA) has taken steps to make it cheaper for Ethiopian residents to make phone calls. The telecommunication regulator has cut mobile termination rates (MTR) to 0.23 Ethiopian Birr (Sh0.54) per minute from the previous ETBO.31 (Sh0.72) per minute. This action is based on a 2022 interconnection agreement between the two parties, facilitated by the regulator.
Starting from the 1st of May this year, callers will enjoy an MTR reduction of 25.8 per cent. ECA has set the term of this new MTR to last till April of 2025. Thereafter, the regulator will review the rates afresh.
The reduction in termination fees is effectively meant to lower phone bills for Ethiopians. In addition, it fosters good competition and helps level the field in the telecommunication sector. Operators may sometimes restructure their phone pricing, but fair competition (based on the regulation of the termination fees) plays an essential role in a continued downward trend in phone bills.
“In essence the intention is to promote competition among operators, prevent anti- competitive behaviour, and encourage a market structure that benefits consumers by offering them a variety of choices and competitive prices,” said Balcha Reba, director general at ECA.
This is good news for Safaricom Ethiopia PLC, a subsidiary of Safaricom PLC and the telco’s biggest startup. Kenya’s Safaricom owns 51.67 percent in company, which is still yet to break even, despite growth in its customer base. It could now have a better chance to take on the dominant player, Ethio Telecom.
The news in Ethiopia comes 2 months after Kenyan industry regulator the Communications Authority of Kenya (CA) revised the MTRs downwards capping them at KES 0.41 per minute. This was a drop from the previous rate of KES 0.58 per minute.
In response to the CA move, Airtel Kenya announced its newly reduced interconnection rates and call minutes. Ironically, while Safaricom PLC is set to enjoy reduced MTRs in Ethiopia, it has in the past fought rate reduction in Kenya where it the dominant industry player.
