Call Uganda or Kenya at Sh3 Per Minute

New Deal Slashes Kenyan Calls to Sh3 Per Minute

by Jevans Nyabiage

464 words

22 December 2010

09:28

All Africa

AFNWS

English

(c) 2010 AllAfrica, All Rights Reserved

Nairobi, Dec 22, 2010 (The Nation/All Africa Global Media via COMTEX) -- Kenyans can now make calls to Uganda for as low as Sh3 minute under a new arrangement between Essar Telkom's yu and Uganda's Warid Telecom.
Yu has been charging Sh17.5 per minute for calls to Uganda but under the new deal, cost of calls terminated to the Warid network, also partly-owned by Essar Group, will be slashed to Sh3 a minute.
This means that calling Uganda from yu to Warid will be charged as a local call.
For Warid subscribers, calling yu subscribers in Kenya will cost Ush180 (about Sh6) per minute -- just like they are calling a local network.
"Yu is pleased to partner with Warid Telecom to demonstrate our continued focus on enhancing the subscriber experience," said Essar Telkom Kenya Ltd country manager Atul Chaturvedi.
Analysts interpret the move as a strategy to tap into the growing Kenyan population in Uganda and increased cross-border trade between the two countries.
Available figures show that Uganda has about 40,000 Kenyan students registered with the immigration department.
Warid Telecom Uganda CEO Madhur Taneja said more value added services would be announced soon.
Mobile phone subscribers calling regional countries -- Uganda, Tanzania, Rwanda and Burundi -- pay heavily while Kenyans calling long distances like the USA, Canada and China pay Sh3 a minute.
For instance, making a call to Tanzania or Uganda, which are part of the five-member East Africa Common Market, costs Sh20 from Airtel and Sh18 from Safaricom while Orange levies Sh17.50 -- almost six times more than making a call to India or Canada.
The high cost of calling regional countries is attributed to the high interconnection fees charged by service providers in African countries.
In a communication when Airtel slashed its international calling rates, the company's managing director, Mr Rene Meza said: "The key driver for this is interconnection costs to these countries. Although they are a popular destination, the interconnection rates charged by these countries limit the rate we charge on these destinations."
"In the world of melting international boundaries, why should communication across borders be so expensive?" asked Mr Chaturvedi, adding: "So, wherever it is possible to get the rates streamlined in line with interconnect costs, we have decided to pass that benefit to customers."
In Kenya, already, local tariffs have halved as the players race to grow and defend their market shares.
The operators warn that the price war is shaping up as the biggest threat to the industry's earnings.
And the introduction of mobile number portability in April next year is expected to trigger another round of price wars that will drive calling costs still further down.