Safaricom fires back at Airtel

Bob Collymore responds on whether Safaricom will lower voice call rates after Airtel’s new 2 bob per minute tariff

Safaricom chief executive officer Bob Collymore has added another twist to the tale in the telco battle that is slowly but gradually gaining in momentum.

The giant telco CEO on Friday said Safaricom will not be dragged into a price war after Airtel launched a default tariff that slashed its voice call rates by 50% to Ksh2 per minute across all networks.

Safaricom does not plan to follow the same route meaning its rates will remain at Ksh4 per minute. “We are seeing a new price war coming… We are not going to move our prices,” he told Reuters. “If we lose market share as a result of that then that is fine. We have to maintain a sustainable business.”

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Kenya’s largest mobile phone operator also said this is a repeat of history as this is not the first time Airtel is lowering its voice call rates. In 2010, Safaricom responded in kind to the Indian-owned company’s prices slash by also cutting its voice call cost. When Airtel did the same in 2011 however, Safaricom maintained its prices.

Earlier this week, the Kenyan unit of Bharti-Airtel announced the Ksh2 per minute default tariff across all networks, a move they said will revolutionise the communication landscape. The move was expected to see a price war rage between the two largest mobile phone operators in the country.

Subscribers

Safaricom : nearly 30 million

Airtel : around 3.6 million

Airtel Kenya CEO Prasanta Das Sarma said the rationale for the introduction of the new tariff was a market trend that saw the number of mobile phone subscribers increase over the years as voice call rates dropped from as high as Ksh50 per minute in 2008 to the current average market range of Ksh4 per minute.

Mr. P.D. Sarma said, “Whenever a tarrif improves [drops in voice call rates], it becomes more and more competitive in the market… more and more customers join because we all love to talk and we don’t want to be restricted by the high tariff.”

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The week had already seen Collymore send shock waves when he announced his surprise return to active duty via Twitter before disclosing the chilling details about his cancer battle on Live television. This has come amid an ongoing Safaricom dominance debate that has involved fellow telcos and the Communications Authority of Kenya (CA). The matter is currently before a Parliamentary committee.

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