Airtel cuts its cost for calls down to Sh2


Airtel commercial director Neil Leo Suare during the launch of firm’s price drive Thursday.

What you need to know:

  • The move follows a decision by the Communications Commission of Kenya to cut the mobile termination rate – what mobile companies charge each other to terminate calls on each other’s network – by 20 per cent last month.

Airtel Kenya has reduced its charges, ensuring that its subscribers call across networks at Sh2.

This signals a new price war in the mobile communications sector. Currently, Safaricom, the largest mobile operator, and Telkom Kenya charge Sh4 per minute for all across network calls. Essar-owned yuMobile charges Sh3.

To benefit from the reduced cost, Airtel’s subscribers will however need to transact at least Sh100 on the company’s mobile money platform, Airtel Money. Each transaction grants a subscriber seven days stay on the offer.

Growing in numbers

“This is a long term strategy. We may not make profits now because we are still growing in numbers but in a few years the rewards of this move will be seen,” Airtel Kenya commercial director Neil Suares said yesterday during the launch.

The move follows a decision by the Communications Commission of Kenya to cut the mobile termination rate – what mobile companies charge each other to terminate calls on each other’s network – by 20 per cent last month.

But the decision to cut calling rates could further worsen Airtel’s fortunes as it fights to move out of the loss-making territory 13 years since its entry into Kenya.

Airtel and yuMobile have said reduction in termination rate would allow consumers to enjoy more affordable calling rates, thus increasing penetration of mobile services.

However, it remains to be seen whether Airtel Kenya’s price reduction will subsequently trigger a rise in the number of subscribers on its network.

CCK in the latest statistics reported a 2.9 per cent decline in national mobile subscription, with a reduction recorded across three mobile operators, namely Safaricom, Airtel Networks and Telkom Kenya.

“Despite promotions and special rates by operators during the period, the mobile subscribers appear not to have been keen to take advantage of the offers,” the regulator said.

In 2010, Airtel launched a vicious price war after the MTR was cut by half leading to the slashing of calling rates from an average of Sh8 per minute to about Sh3.

The company also hopes the new tariff structure will help stir growth in its mobile money platform.