A tale of CCK, Zain, Safaricom and YU.
What a week its been in Kenya’s mobile networks sector! So much has happened in such a short space of time. It all started on Monday this week when the Communications Commission of Kenya (CCK) announced a 50% price reduction on mobile network interconnection rates from Kes. 4.42 to Kes. 2.21. This action in turn led to Zain immediately lowering their call and SMS rates dramatically as reported on this blog thereafter.
Zain’s new low tariffs triggered a stampede of new cutsomers and as such its interconnection to Safaricom clogged up, leading to poor service. Zain then proceeded to blame Safaricom as the “dominant” mobile network for not upgrading their interconnection capacity in-time so as to accommodate the deluge of new customers signing up. Safaricom in turn noted that Zain had failed to inform them in good time to upgrade their interconnection capacity which they said pointed to Zain’s bad planning and ulterior motives.
As all of this drama unfolded, YU announced new call rates of Kes. 3.00 and SMS rates of Kes. 0.50 yesterday (YU’s SMS rates are half those of Zain). In the final analysis, we are clearly in the throes of yet another mobile tariffs war. However, no word yet on how Safaricom and Orange will respond to these new developments. One thing is for sure, Safaricom will definitely come back with something big, especially considering they still hold 80% market share in Kenya.