Kenya price war rages on

TELECOMS

By Semaj Itosno, Nairobi, Kenya

Kenya’s mobile subscribers are reaping big from the ongoing price wars among local telcos.

Just weeks after Airtel Kenya took the war a notch higher by offering subscribers discounts of between 15% and 25% on talk time, Safaricom has hit back with a new promotion where her subscribers can enjoy up to 75% discount on calling rates.

Dubbed Wakenya Tuongee (Swahili for Kenyans let us talk),  the promotion runs between 24th of July and August 23, and will see Safaricom subscribers pay Ksh 4 for the first minute of their call, Ksh3 for calls between 1 and 2 minutes and KSh 2 for the calls that last between 2 and 3 minutes.

Calls that last for more than 3 minutes will be charged at Sh 1.

Mobile firm Essar Telecom’s yuMobile, on the other hand, has been running promotions that let subscribers call within network for free under certain conditions. Yu cut its calling charges to a flat rate set up fee of Sh5per day for the first minute of calls made from the network every day and its subscribers can call within its network for free. It however charges Sh3 per minute for off net calls.

The ongoing one month Airtel promotion ends on the first week of August 2012  and benefits subscribers buying scratch cards from the 31 Nakumatt supermarkets outlets across Kenya.

For the Airtel promotion, subscribers who buy airtime worth Sh250, 500 (US3, 012) and 1000 (USD12) will get discounts of 15, 20 and 25% respectively.

The price war can be read as a move by the telcos to gain market share and it comes at a time when leading operator, Safaricom, has had its market share nibbled into by rivals.

Safaricom CEO Bob Collymore said the Wakenya Tuongee promotion will only apply to Pre-Paid customers making Safaricom-to-Safaricom calls from 6am to 6pm.

To enjoy the reduced rates, customers will be required to subscribe to join the promotion by dialing *777# and calls will be charged on a per second billing basis.

However, Collymore said the other rates for calling other networks within Kenya and international calls will remain.

The market leader also aims to attract more subscribers through a new service dubbed ‘Okoa SIM’ (Swahili for salvage the SIM) that will let subscribers back up information on their SIM cards.With this service customers will be able to back up all the information on SIM cards in the cloud meaning they can retrieve all their important contacts and other information if their SIM cards are stolen, lost, or damaged.

Safaricom remains dominant with 67.7% of Kenya’s mobile phone subscribers. Airtel has 15.7%, Orange 10.4% while Yu trails with 6.2%. 

The competition is also raging on the data front, with Airtel now retailing its 21 megabytes per second (Mbs) modem at Ksh1,999 (USD23) down from Ksh4, 500 (USD53) while the 7.2Mbs modems will go for Ksh999 (USD12), a 50% drop.

Safaricom, whose mobile data market share as of December 2011 stood at 77.1%, has a 7.2Mbs modem going for Ksh1,999 (USD23).

Its 21Mbs modem, on the other hand, costs Ksh9, 999 (USD118) and comes bundled with 20 gigabytes of data.

Fourth-placed Telkom Kenya is selling its 3G+ 3.1Mbs modem retailing for Ksh3, 999 (US$47) while its 21Mbs device is going for Sh1, 999 (USD 23).

Data from the Communications Commission of Kenya (CCK) show that 17.3 million Kenyans had access of the Internet in the period to December up from 14.3 million in September 2011, pushing Internet penetration to 44.12% from 36.3%.

The statistics further show that mobile Internet subscriptions on GPRS/EDGE and 3G recorded the highest portion of the total Internet subscriptions of 6.07 million subscriptions compared to 5.37 million subscriptions recorded during the previous period, a 13% rise.