Zain Kenya lowers interconnectivity charges

Mobile service operator Zain Kenya has opened up the next battle of the price war with a 60 percent reduction in the cost of calls across networks.

Zain's Vuka tariff model charges subscribers a flat rate of 8 Kenyan shillings (US$0.11) per minute, including taxes, to call any network, said Zain managing director Rene Meza. The charges are per second, and SMS (Short Message Service) will be charged 3 shillings across local networks, he said.

The move was immediately lauded by Telkom Kenya CEO Dominique Saint-Jean, who argued that last week’s launch of the Orange network has forced other players to respond with improved offerings.

“Our new Orange mobile has inspired service providers to begin to focus more on what customers want, and we’re pleased to have raised the bar,” Saint-Jean said. “Ultimately, more choice means the public benefits, which is always good news.”

Telkom Kenya announced that it would charge 14 shillings for cross-network calls on the Orange network, while Safaricom charges between 20 shillings and 30 shillings across networks, depending on the tariff plan.

“I would like to see Safaricom matching Vuka tariff,” said mobile user Phares Kariuki, who was impressed by Zain’s latest effort.

The reduction is motivated by Zain’s desire to enhance its status as the leading mobile service provider in terms of network quality, coverage and steady growth in subscriber base, Meza explained

“Zain’s market share has been growing steadily over the past three months and is currently taking over 50 percent of the new mobile subscribers monthly,” Meza said. “The new tariff plan makes it cheaper than intra-network calls in competing networks.”

The reduction in cross-network tariffs is in line with the 4.42 shillings standard interconnection charge set by the Communications Commission of Kenya, which will be enforced in January. The CCK set this year's standard at 5.27 shillings, down from the 6.28 shillings charged last year.