Safaricom assures staff despite price wars

February 8, 2011

, NAIROBI, Kenya Feb 8 – Mobile telephony market leader Safaricom has ruled out immediate realignment of its workforce as it begins to feel the pressure of the current price wars that has led to a decrease in revenue.

According to the operator, it is currently reviewing the current market dynamics as it looks at how best to complement the declining voice revenues.

Safaricom Chief Executive Officer Bob Collymore told Capital Business in an interview that despite the mounting pressure on the business, the focus was to improve the efficiency of the current workforce.

"We have about 3,000 people that we need to keep the engine running. Right now our strategy is not to reduce the workforce and I have made it very clear to them," Mr Collymore said.

He said at its current tariffs, the business is self-sustaining arguing they were preparing for future price cuts as the Communications Commission of Kenya (CCK) continues to evaluate the interconnection and termination rates.

"At our current prices and numbers it works but for other people it could be a challenge," he said.

The cut throat competition in the telecoms market has proved a reality check for operators as they look to keep costs down.

Telkom Kenya has indicated that it could result to restructuring its workforce if the current low prices were maintained in the market.

Telkom Kenya CEO Mickael Ghossein on Monday challenged the CCK to review and clearly define interconnection charges between mobile operators in an effort of stabilizing the market.

As a cost cutting measure, Airtel Kenya and Essar Telecom\’s Yu have outsourced a number of their services that has rendered a number of jobs obsolete.

The Safaricom CEO however ruled out outsourcing jobs, arguing it was not part of the company\’s strategy.

"I believe we have the best workforce in this industry and we don\’t think outsourcing is the best way to manage the company especially in critical sectors," he said.

Mr Collymore however called on the government and the CCK to address the current market situation arguing it was creating unnecessary anxiety among shareholders and customers alike.

"Intervention is never the best way but the government has a role to play and they need to make a call on what they think the right solution is," he said.

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