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September 19, 2018

Safaricom bows to customer pressure, to cut data cost ‘soon’

Safaricom CEO Bob Collymore during a post AGM media briefing in Nairobi yesterday /ENOS TECHE
Safaricom CEO Bob Collymore during a post AGM media briefing in Nairobi yesterday /ENOS TECHE

Safaricom has announced plans to lower data prices as the scramble for customers moves from voice to internet services.

The telco’s chief executive, Bob Collymore, announced this during the firm’s annual general meeting, where investors earned Sh1.10 per share up from Sh0.97 in the previous financial year.

“We will be reviewing our data segment to make prices and services more customer friendly. Our focus will be on data management tools to enable customers use their data more effectively,” Collymore said.

He said the firm has received a lot of feedback from customers on data services and promised to slash the prices “very soon”.

He, however, declined to give more details about the price cut.

Latest industry data released by Communications Authority of Kenya indicate Safaricom’s share of the voice traffic dropped to 72.5 per cent in the quarter to December 2017, from 80.6 per cent in a similar period a year earlier.

This is a market drop of 8.1 per cent, while rival Airtel Kenya gained 22 per cent up from 13.5 per cent in a similar period the previous year.

Safaricom dismissed the price control proposal by Communication Authority as subjective and unhealthy for the sector’s growth and competitiveness.

Collymore termed the proposal as ‘silly’, saying Safaricom’s market dominance is based on “excellent services, hard work and huge investment”.

“Market dominance does not come on a silver platter. The price control proposal is ‘silly’ as it punishes success, burdens consumers and only benefits shareholders in rival firms,’’ said a seemingly angry Collymore.

“The requirement that Safaricom can only roll out services that are replicable by its competitors will stifle our ability to innovate around customers’ calling habits to offer them tailor made pricing which have been a big hit with customers,” he said.

Safaricom chairman Nicholas Ng’ang’a said plans to force the firm to share infrastructure with other players in the market is encouraging laziness, killing innovation, while punishing success.

In February, CA gave the clearest signal that it plans to implement the findings of a study it commissioned in the wake of mounting concerns that the operating environment was stuck against smaller telecom firms.

The study, undertaken by Analysys Mason, recommended wide-ranging measures aimed at preventing abuse of dominance, including retail price interventions.

Among remedies proposed are retail price interventions, tower sharing and national roaming. Airtel, the second largest operator, and Telkom, the third, have welcomed proposals to regulate tariffs.

While yet to be approved or implemented, the fact that those suggestions have brought forward is an indication we could be heading into an era where success,rightfully earned through well structured market strategy, innovation and investment, is punished,” Ng’ang’a said.

Safaricom share lost Sh1.25 to close at Sh28.25 at the bourse.

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