Zain Kenya reviews tariffs

May 13, 2010

, NAIROBI, Kenya May 13 – Zain Kenya has launched a 50 percent reduction in tariffs in a bid to woo new customers.

Making the announcement on Thursday, Zain Kenya Managing Director Rene Meza said the new rates would help the operator aggressively go after the mass market after years of mainly focusing on corporate clients.

The move will see Zain customers pay Sh3 for inter network calls and Sh6 to any other network between 6pm and 6am.

“Most Kenyans want to make most calls from six and what this means to the ‘mwanainchi’ (ordinary citizen) is that they will have affordable rates and low calling rates to other networks,” Mr Meza said.

The mobile operators in the country have in the recent past been embroiled in a tussle with the Communications Commission of Kenya (CCK) over new regulations that the government says are meant to level the playing field.

The new regulations require the dominant player in the industry to submit an application to the CCK three months prior to reviewing a tariff or seven days prior to the introduction of a new tariff.

Already, the government has pledged to review the new rules after Safaricom lodged a complaint, but they remain in effect until amendments are made.

On Thursday, Safaricom’s Head of Regulatory Affairs Nzioka Waita welcomed the decision to review the rules saying it showed an appreciation of the concerns raised by the industry.

“In particular we feel reassured by the Government’s move to distance itself from the introduction of price controls and look forward to meeting with the CCK and other industry stakeholders to agree on suitable amendments to the regulations that are in the long-term interests of the consumer and the industry players. We are confident subsequent consultations shall be held in the spirit of fairness,” Mr Waita said.

Mr Meza also welcomed the move arguing it would help clear the misconception they were targeting any particular player.

“There should be concern from any mobile operator on the regulations for two simple reasons. One they don’t target only one operator and the regulations are the outcome of communication between all operators and the CCK,” he said.

He was however quick to add that reduction in tariffs would not be the only answer towards growing its market share adding they would also explore other methods to lure new subscribers.

“Pricing alone obviously will not give you the competitive advantage you need because you also need to develop distribution networks, be strong in mobile commerce and offer competitive and good data services,” he said.

Zain Kenya plans to invest over Sh350 million to roll out Zap outlets countrywide to extend its reach.

“We have been doing very well on Zap with over 500,000 customers transacting Sh250 million on a monthly basis. However, we are aware of the challenges we have in terms of Zap outlets availability,” he said.

In anticipation of the review of the 3G spectrum, Zain also plans to test its 3G network in July in Nairobi, Mombasa and other commercially viable areas.

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