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Mobile firms export price wars to clients calling outside the country

Posted by Administrator on September 30, 2010

After weeks of fighting it out in the local market, mobile phone operators have shifted their price wars to international call tariffs, slashing the rates by more than 10 times.

Leading the pack are Zain Kenya and yu, who in the past week have announced new international calling charges.

Zain subscribers will pay Sh3 per minute to call USA, Canada, China and India — the home country of its owner Bharti Airtel — Sh20 for the East Africa, South Africa, UAE and Sh30 to the rest of the world.

In its reply, yu has slashed the price by a further 51 cents to Sh2.49 per minute for calls to USA, China and Canada and its home country, India, while charging Sh12.50 for calls to the UK.

Those calling East Africa, UAE, France, Holland and Germany will pay Sh17.50 per minute.

But while this is a relief for Kenyans calling long distances like USA, Canada and China, subscribers calling the regional countries have nothing to celebrate.

Against expectations, making a call to Tanzania or Uganda, who are part of the five-member state East Africa Common Market, will cost Sh17.50 from yu and Sh20 from Zain — almost six times more than a similar call to India or Canada.

The high cost to reach regional countries is being attributed to the high interconnection fees charged by service providers in African countries.

“The key driver for this is interconnection costs to these countries. Although they are a popular destination, the interconnection rates charged by these countries limit the rate we charge on these destinations,” says Mr Rene Meza, chief executive officer of Zain Kenya.

Yet, in recent years, there have been efforts to make regional rates lower.

For instance Zain Kenya, as part of Zain Africa, has the One Network service, which allows its users to travel to other countries within the network and still pay local rates, but that is on its network only.

Similarly, in 2007, Safaricom partnered with Vodacom Tanzania, MTN and UTL in Uganda in the Kama Kawaida service that allows subscribers to top up with partner networks scratch cards, when travelling within the region and call home networks at local rates.

Although such partnerships exist, making calls is still quite expensive.

According to Atul Chaturvedi, country manager, Essar Telecom Kenya Ltd, the Sh17.49 for yu calls to East Africa is a much better negotiated interconnects rates.

“In the world of melting international boundaries, why should communication across borders be so expensive?,’’ Mr Chaturvedi said adding:

‘‘So, wherever it is possible to get the rates streamlined in line with interconnect costs, we have decided to pass that benefit to customers.”

Source: http://www.nation.co.ke/business/news/-/1006/1019928/-/5nkq8az/-/index.html

One Response to “Mobile firms export price wars to clients calling outside the country”

  1. NWM said

    Am loving it,receiving calls everyday from Kenya feels good and I can save some $$$$

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