Mobile Termination Rates Regulation and Competitive Strategies of the Telecommunication Companies in Kenya

Abstract

The prices that mobile telephone operators charge other network operators to terminate calls on their network have become a highly contentious issue among regulators worldwide. The objective of this study was to investigate effects of mobile termination rates regulation on competitive strategies adopted by telecommunication companies in Kenya. This study used cross-sectional research design and was quantitative. The target population of the study was the telecommunication industry in Kenya. Since the population of the study was small, the study included all the target population into the study hence a census study. The main instrument for data collection was structured questionnaires that allowed for uniformity of responses to questions. Descriptive statistics including frequencies and percentages, mean and standard deviation were used for comparison. Most of the respondents disagreed that Government regulation of termination rates increased their market share. Further, the respondents agreed that Government regulation of termination rates increased our competitiveness. The respondents strongly agreed Government regulation of termination rates increased enabled them to restructure their tariffs. The respondents further disagreed that Government regulation of termination rates increased the level of customer satisfaction with their services. Most of the respondents’ agreed that Government regulation of termination rates increased the level of customer satisfaction with their services. The study concludes that Government regulation of termination rates do not increased the organizations competitiveness, financial performance, and do not enabled the companies to attract more customers to their networks. It further concludes that Government regulation of termination rates do not increased organizations market share and operating expenses. This study therefore recommends that the governments should impose regulations that enhance the performance of the businesses while ensuring that their operational cost does not increase and that organizations ought to rethink their position on the Kenyan market, came up with innovative ways to improve the strength of their network, develop and diversify their products and develop scenario plans to deal with the sudden changes.