Mobile calling rates war intensifies
12 April 2013, 10:50
Nairobi - Telkom Kenya’s Orange has reduced its mobile calling and SMS rates in a bid to rope in more subscribers and ward off competition from rivals Safaricom, Airtel and YuMobile.
The promotion offer dubbed ‘Tujuane’ started running on Thursday and will continue until the end of May.
The firm reduced its calling rates for its customers calling other networks to Sh3 ($0.03) per minute down from Sh4 ($0.04) per minute.
It has also brought down SMS rates by 50 per cent and now a text message – both on-net and off-net – will cost Sh1 (US$0.01).
Mickael Ghossein, chief executive Telkom Kenya said the new tariffs were in response to price elasticity of the market, which he said significantly influenced usage habits of subscribers.
“The move follows intense competition in the mobile phone industry, including Internet and data, as players all battle to win over customers,”
Ghossein says, adding that Orange made the decision to raise its stakes in a market deemed the most competitive in East Africa.
Meanwhile, Essar Telecoms, operating locally in Kenya as yuMobile, said plans were at an advanced stage to acquire Sh8.5 billion ($100 million) next month to upgrade and modernize its network.
The areas in which the firm is looking to invest include increasing its network coverage and fourth generation (4G) mobile network that has been proposed as a partnership between the government and the private sector.
Additionally, Essar of India has pumped $155 million in the company in recent months that Madhur Taneja, the yuMobile Country Director, says went towards repayment of loans that the operator had taken in its initial phases as it set up in Kenya.
“We are a debt free company. In the past couple of months, $155M has come from our promoters (Essar Group) to clear all loans that we had with banks and thus we no longer have debt, but equity.
"This reiterates not only the group’s confidence in our business, but also, the belief we have in the growth we can anticipate in the Kenyan market.
“We now need more funds that go towards network expansion and this will be raised through equity financing. The efforts to raise capital for investment are progressing in the right direction at the right pace,”
The company will be raising expansion capital in two tranches – the first will be raised by the end of March and will be used in network expansion in the course of this year.
While 4G has been downplayed by a segment of the industry as making no business sense at the moment, yuMobile says 4G network is crucial as it as saying that it never invested in 3G and now wants to skip that and go straight to 4G.
- CAJ News