Safaricom’s share price falls 5 p.c. at NSE

Safaricom shares at the Nairobi Stock Exchange fell five per cent to close the day at an average of Sh5.40 on Friday, as competitors drastically slashed calling rates.

At one point, the share touched a low of Sh5.20 with investors panicking over the impact on Safaricom’s revenues.

“I think it is an overreaction. Today’s move was quite dramatic,” said licensed data vendor, Aly Khan Satchu.

Safaricom is yet to react to the new pricing.

During Thursday trade, the company stirred the market with 36 million shares changing hands at between Sh5.65 and Sh5.80. The share price closed at an average of Sh5.70, a drop of five cents on its closing on Wednesday.

Safaricom’s share is one of the major determinants of the performance of the NSE 20-share index, with 40 billion listed shares. The index yesterday lost another 6.19 points to close at 4597.07.

Another mobile phone operator, yu, cut its calling charges to other networks to Sh3 per minute, following a similar move by Zain on Tuesday, in a quick response to the reduction of interconnection rates from Sh4.42 to Sh2.21.

Essar’s yu said it will charge 5 cents per second for calls to other networks, which translates to Sh 3 per minute, and Sh0.50 for sending SMS.

“Our strategy is to be the best value-provider for telecoms services in Kenya and we stand by it. The lowering of interconnection charges by CCK is a welcome move and we have pass this benefit to our subscribers by lowering our calling and sms charges,” said the country director, Atul Charturvedi.

Communications Commission of Kenya announced the reduction on Wednesday, saying it expected the operators to pass the lower charges to the customers.

CCK director-general, Charles Njoroge, said he expected the operators to reduce their charges, failure to which it will act by placing price caps, particularly by dominant players.