True... I remember when YU had 7.50 across ALL networks + if you received a call... they gave you 75cents per minute!

My research still shows 20/= scratch cards for ZAIN litter the streets against 100/= & 50/= for safaricom.

Callers who were using Zain are now SMSingwhile calling with their safaricom line.

If you have a better way of knowing how this battle is affecting these companies just share with us

Cost cutting....cost cutting thats the name of safcom next game.

Otherwise kimeumana...
I wonder what those that are buying safcom shares now are thinking???
Could they be in denial of safaricoms corporate armageddon??

Kenya telecom price war bad for sector: govt official

Communications Ministry Permanent Secretary Bitange Ndemo tells Reuters...

"They came as a surprise and cut too deep. They should have taken into consideration the commercial and business interests"

Ndemo said with interconnection rates at 2.21 shillings, taxes at 26 percent, plus salaries and agents fees to be paid, the companies would struggle to make a profit from voice revenue.

"If you have no resources for reinvestment, you impact the quality of the service ... but we can't tell them, 'guys, behave'. We are assuming it makes business sense."

Ndemo lives in the stone age. This guy cannot convince ISPs to bring charges down to realistic levels and promote internet usage, so the consumer suffers until they "recoup their investments"? What uptake of broadband is he talking about? I dont see any....

Get serious! Let the cut run deep, he's just worried about the sudden drying up of taxes from Safcon, meaning our ministers and mps will have less fuel allowance to ferry their relatives around town. lets face it, our taxes are wasted on those idlers anyways.

Change is coming, maybe not political, but surely economic!

@KulaRaha, you've imputed wrong motive, yet Mr. Bitange Ndemo is argued to be one of the most hardworking, effective Permanent Secretarties well respected by all players in ICT industry.

In fact Fibre Optics, TEAMS, lower Interconnect Rates, Digital Villages, Kenya ICT board, strides in Business Process Outsourcing, e-Government, duty free computer regime, local digital content, empowering young entrepeneurs are some of this achievements.

With a PhD in Industrial Economics from the University of Sherfield UK, an MBA from the University of Minnesota and University of St. Thomas, and a Bachelors Degree in Finance; he is much more qualified than most of us on this matter.

@Kularaha, the Indian mobile market has 650million users, Bharti alone has 150million, however analyst expect a telcos bubble to burst in India due to price wars (layoffs, closing down of mobile companies e.t.c). Bharti had a major decline in profits (32%) in the last financial year and it's competitors, the main one reliance has it's profits nearly wiped out. Bhartis main incentive for buying African operations was to try and escape the imminent chaos that will surely happen in India. Indians are obsessive (even nonsensical) about saving, they switch of vehicle lights in lit roads to "save the battery". Bharti sold out it's entire mobile infrastructure in the process of these wars, so? Why should Ndemo cheer? By the way, it is important to consider profits from well managed private companies as an informal tax rather than feel bitter about "supernormal profits". Safcom was able to acquire 3G earlier than Bharti was in India, they were able to put in funds into a much required fiber optic cable, in the end these gains accrue to you amongst other infrastructural developments they are undertaking. Cheap is sometimes cheap.

Wow! So every Safaricom subscriber contributes 19 dollars to yearly profits while Bharti customers contribute only 2 dollars? Hmmm... Call it what you want, but Safcom has been screwing people in the ass!

Hallelujah my brother...you have seen the light!! And every Safcon subscriber uses 75 minutes while Bharti ones use 450. Looks like we were being screwed not just in the ass....

What infrastructure assistance has Safcon brought? They bought all that fibre and 3G with your money, not theirs!

Don't beleive the hype....

Herein lies the problem. Safcom has lost credibility coz people now realize they were getting screwed and overcharged to fund hyper-profits by a near monopoly.
Trust is a pretty hard thing to win back. That's SCOM real loss. Airtel needs to do a SouthWest-like ad blitz to get the people on their side. It would go something like this:
"Before we came in with our new offers: Kenyans were paying through the roof for calls (show a Kenyan calling and having to talk super fast and the dial tone for no more money coming immediately after just filling up with credit).
Airtel has come into the market with new rates designed to ease your communication hustle (show a Kenyan talking and talking but still has credit). Then have a voice warning the viewers that if they don't support Airtel the big bad wolf will wait and then go back to the high prices regime - it's a temporary offer remember? Then ask the public to support the under-dog, talk about their good service, strong networks etc. Maximize the impact of this thing. Are any smart Airtel management people reading this? ... It's a classic HBS case.