Friday, August 20, 2010

Yu lowers calling rates

Written By:Lawrence Njenga/Rose Kamau , Posted: Fri, Aug 20, 2010


Yu subscribers can now call for 5 cents per second across all networks


The price war in the mobile telephony sector took a new twist Friday as service provider Yu lowered its calling rates.

Under the new rates Yu subscribers can call other networks at 5 cents per second and send SMS to other subscribers within the network at 50 cents per text message.

The move comes two days after Zain lowered its calling rates to three shillings to all networks, a move which did not go down well with its major rival Safaricom though it is in line with a Communication Commission of Kenya's (CCK) directive that mobile service providers lower their calling rates by 50%.

Safaricom says Zain should have issued a seven day notice before taking the step. On the other hand, Zain accused Safaricom of jamming its calls to the network, a claim the latter denied, blaming the failure by Zain subscribers to complete their calls on Zain's systems.

Under the new rates launched Friday by Yu, subscribers can also make calls to 5 friends or family at 2 cents per second.

"Our strategy is to be the best value provider for telecom services in Kenya and we stand by it. The lowering of interconnect charges by the CCK is a welcome move and we have made the decision to pass this benefit to our subscribers by lowering our calling and short message service (SMS) charges", said Atul Chaturvedi, ETKL, Country Manager.

Yu customers can also enjoy data bundles of unlimited daily and monthly offers of Ksh 99 and Ksh 999 respectively. The price of a Yu modem is Ksh 1,799.

The war in the mobile telephony sector may ultimately be of benefit to Kenyans who have been paying relatively higher prices than other subscribers in the region.

"clubbing"

Zain which was recently bought by India's Bharti Airtel seems to be betting on the model that people talk more when calls are cheap, an ideology employed to capture the Indian market which the company hopes to introduce to Africa.

What this means is that Bharti aims at long term profits than short term returns.

On the other hand Safaricom works on a strategy known as clubbing where since it enjoys the largest market share, it makes it cheaper for its customers within the network to call while call rates to other networks remain high.

For its mobile money transfer M-PESA, Safaricom charges 25 shillings to its registered users while non registered subscribers are charged 75 shillings.

The eyes are now on Safaricom to see whether they will swallow the bait and lower calling charges or remain adamant at the risk of losing customers.

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