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Safaricom in Sh1 call tariff for prepay clients

NAIROBI, Kenya, May 20 – Mobile services provider Safaricom which announced a 12.4 percent drop in profit last year has now introduced a Sh1 tariff offer for its prepay customers.

The two-month promotion is part of the operator\’s strategic move to provide value added services for its customers.

Safaricom Head of Consumer Propositions Rita Okuthe said on Friday that in the increasingly competitive environment, Safaricom would continue to ensure that all strategic actions are aligned with customer needs and their quest for real value.

"It\’s important that we retain our customers while at the same time be competitive and we believe that by doing this (promotion) we are giving real value to our customers," Ms Okuthe said.

Dubbed Bamba Na Bob, the promotion allows Prepay customers to spend Sh1 per minute for all calls made within the network from 10 pm to 10 am daily. It runs through to July 20.

Ms Okuthe said the Bamba Na Bob promotion would see Safaricom Prepay subscribers make savings of up to 67 percent, for 12 hours every day over the next two months. All pre pay customers are eligible. To enrol, a subscriber will simply dial *555# for free.

"A lot of people think right now think you can\’t get much out of Sh1 but it will allow customers talk for longer," she said.

There has been a vicious price war in the telecoms market as the industry regulator continues to review interconnection fees. The charges are set to drop even further to Sh1.44 in July from the current Sh2.21 offering new headroom for a further drop in the cost of voice calls and text messages.

Safaricom\’s profits for the year ended March 2011 dipped 12.4 percent as voice revenues remained static at Sh63.5 billion. Voice calls however remain Safaricom\’s biggest revenue driver that accounted for 66.9 percent of total revenue last year down from 68.6 percent in 2009.

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"Although the voice market to a certain extent has matured there is still a lot of scope because there are still many Kenyans who are not connected on a mobile phone.  We believe at the right price people will talk more," Ms Okuthe said.

Safaricom has however indicated that it will oppose further reduction in interconnection rates as it threatens to erode market value.

"The model is not in wide use, only applied in a few European counties such as the Netherlands, a country with mobile penetration in excess of 110 percent," Safaricom director of corporate affairs Nzioka Waita said on April 26.

in August 2010, the Communications Commission of Kenya cut termination rates by half from Sh4.42 to Sh2.21, and expected this to fall further this July to Sh1.44 and then to Sh0.99 in 2013.

Follow the author at https://twitter.com/MjKaranja

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