• White Papers |
• Blogs |
• Video |
• Webcasts |
• Podcasts |
• Events |
• Solution Centers |
• Newsletters |
• Magazine |
• RSS Feeds

Mobile Price War in Kenya Reaches Fever Pitch

By Rebecca Wanjiku

May 21, 2008 — IDG News Service —

Kenyans are benefiting from a price war between mobile phone providers Safaricom and Celtel.

On Monday, the companies tried to outdo each other by announcing cheaper calling rates within their networks. The two announcements came within hours and statements from the companies seemed to indicate the battle is far from over.

Celtel Kenya announced live on a local television station that it had introduced extended off-peak hours for its prepaid subscribers. Its subscribers will make calls at 3 shillings (US$0.05) between 6 a.m. and 6 p.m. and all day during the weekends.

Hours later, Safaricom sent a statement to the media announcing a new prepaid tariff dubbed Ongea. In this tariff, subscribers will pay one flat rate of 10 shillings all day and night on calls made within the network.

"This is not a temporary promotion but a new and permanent value proposition for all our prepaid customers," said Michael Okwiri, Celtel's public relations director.

Michael Joseph, Safaricom CEO, said "With the low flat rates of 10 shillings on Ongea, our subscribers will be able to call more often and longer and enjoy the freedom to call any time irrespective of the time of day or day of the week."

With this latest battle for subscribers, Kenyans are experiencing what the telecom industry will look like by the end of year when Telkom Kenya rolls out Orange mobile service and Econet wireless starts its much-anticipated network.

Last week, Information and Communication Permanent Secretary Bitange Ndemo said that rates are bound to come down if a proposal to reduce the 26 percent tax is accepted by the treasury. The tax has made mobile phone calling charges in Kenya the most expensive in the region.

Kenya's telecom industry has been rocky in terms of inter-network prices, which remain high because of competitive actions on the part of the two service providers. Last year, the Communication Commission of Kenya had to intervene, introducing a 30 shilling market cap on the off-network calls. But the regulator has consistently declined to regulate the cost of cross-network connectivity.

The high cost of interconnectivity has led to Kenyans walking around with two cell phones, one with the Celtel line and the other with the Safaricom line.

 

Email

Print

Comments

Share [+]

Digg This

SlashDot

LinkedIn