Ruling on the appeal by KenCell Communications Limited (now Celtel Kenya) over
interconnection rates for payphones in the matter between KenCell and Telkom
Kenya Limited - 31st October 2001
On 6th August, 2001, M/s. KenCell Communications Limited (hereinafter referred to as
KenCell) wrote to the Communications Commission of Kenya (hereinafter referred to as
the Commission) informing it that the protracted discussion between themselves and M/s.
Telkom Kenya Limited (hereinafter referred to as TKL) had broken down and that they
were unable to reach any agreement on an appropriate local call interconnection rate for
The Commission on February 2000 granted KenCell a licence for the provision of Mobile
Cellular services throughout the Republic of Kenya for a period of fifteen (15) years
renewable for a further period of ten (10) years. As a condition of the grant of the licence
for operation of the said services, the Commission enjoined KenCell to install Payphones
as part of its Universal Service Obligation of ensuring that telecommunication services
were availed to all Kenyans at reasonable rates. This licence was granted pursuant to
section 25 of the Kenya Communications Act, 1998 (KCA).
Consequent upon the grant of the licence KenCell commenced mobile services in
September, 2000 and were expected to commence payphone services in November, 2000
and roll-out a total of 300 payphones by 31st December, 2001.
On 12th March, 2001, KenCell informed the Commission that they were unable to start
providing services on their already installed payphones in Nairobi due to inability of TKL
to accept a negotiated interconnection rate of Kshs. 0.86 cents per minute as discussed
and agreed at between the two companies' technical working teams during the meeting of
14th September, 2000 that was attended by Miss Claire Ruto of Kencell and Mr. S.
Abdalla, and M. J. A. Bett of TKL. The minutes were signed by both parties.
The two parties held a series of other meetings culminating in the meeting of 16th July,
2001 chaired by the Commission to seek an amicable agreement to the stalemate on
interconnection rates for payphones. At this meeting the parties agreed to hold a further
meeting to seek for a common and mutually agreeable interconnect rate.
In their letter of 16th August, 2001, Kencell have appealed to the Commission to arbitrate
on the issue of local call Interconnect rates for payphones as they were unable to reach an
amicable agreement with TKL.
The Commission wrote to TKL on 18th August, 2001 informing them of the grievances
of KenCell and requesting them to make submissions to the Commission. TKL wrote to
the Commission on 22nd August, 2001 disputing the contention of Kencell that, there had
arisen a disagreement and informing the Commission that the tariff for interconnection
for payphones proposed by KenCell of Kshs. 1.67 was not agreeable to them as accepting
the said tariff would amount to TKL subsidizing the customers of Kencell which would
not make business sense.