NAIROBI, Kenya, Jan 7- Safaricom has announced a 71 percent reduction in text message charges intensifying competition in the telecommunication sector.
In an advertisement, the firm said its customers will now pay Sh1 for each SMS sent to subscribers on the Safaricom network instead of the previous Sh3.50 charge.
Text messages to other local networks will be charged at Sh2 each down from Sh5, in what the firm said is a permanent tariff that applies to both Prepay and Postpay subscribers.
“The launch of this proposition takes into consideration our over 17 million subscribers, across the whole country, all having a variety of needs that must be addressed, and where possible, in uniformity,” said Chief Executive Officer Bob Collymore
Kenyans have been enjoying cheaper calling and messaging rates since August last year when the Communications Commission of Kenya (CCK) issued guidelines that slashed the interconnection rates by 50 percent to Sh2.21.
While issuing the new regulations, CCK Director General Charles Njoroge directed the operators to re-negotiate lower termination rates for SMS’s. They were expected to file the new charges with regulator within three months.
The commission imposed price caps on mobile and fixed termination services which are to be implemented on a declining grind path within the next three years. The termination rate will further decline by 35 percent this year and then progressively drop by 25 percent and 15 percent annually in 2012 and 2013 respectively.
This means that subscribers can expect to see these rates come down further in line with what CCK calls the ‘efficient cost levels’.
The regulator expects the implementation of these rules to result in market efficiency and spur further growth in the industry, which has outperformed all the other sectors in the last decade.
The last five years have experienced an exponential growth in the mobile penetration estimated to close at 21 million by the end of 2010. This has in turn brought millions of Kenyans who were financially excluded into the formal sector.
A report released by the World Bank in December 2009 showed that without the tremendous growth of ICT, Kenya’s economy would only have expanded by 2.8 percent since the 2000.