Other Methodologies Considered The Commission noted that the study considered other methodologies particularly benchmarking. The countries used for benchmarking were selected on the basis of regional proximity and a number of economic and geographical factors. In weighting the factors, a scoring system is used that assigns a higher weighting to economic factors (i.e. similar GDP per capita and GINI coefficient to Kenya), as these tend to be particularly important factors in determining the level of penetration and usage of telephony services. Desire to Promote Competitive Rates and Attract the Market The Commission notes that the study results indicate that all operators, fixed or mobile, have a monopoly on terminating calls into their networks. In order to promote fair competition on retail tariffs, the Commission is of the opinion that there is need for regulating interconnection rates when the market fails. The Commission has noted that lowering interconnection charges will provide the impetus for lowering retail prices, expanding the market and subscriber base. Lower retail prices will result from competition which is likely to emanate from a well regulated interconnection regime preventing operators with Significant Market power (SMP) in the interconnection service market from abusing their dominance. Financial Implications The Commission notes that in the short run there will be less revenue realized from interconnection by operators who are currently net receivers. However, net payers will experience a reduction in costs by paying less interconnection charges to other operators and that traffic patterns will change through increase of subscribers and talk time. 4