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Safaricom stays put on calling charge cut

Safaricom has indicated it will not heed to the unending pressure to lower its voice tariffs, offering upsetting news to its more than 24 million subscribers.

The telecoms firm said yesterday it has no intentions to review downwards the call charges of Sh4 per minute to Sh3 per minute—the fee one of its competitors is currently charging their subscribers to call other networks.

“I don’t want to disapprove of our competitors’ strategy; we think the Sh4 call tariff in place is suitable at the moment. We run a business model that is sustainable,” said Safaricom chief executive Bob Collymore, adding that the push to lower the costs is not viable and could put the company’s strategy at risk and expose it losses.

The issue emerged yesterday during the company’s annual general meeting where some of the shareholders sought explanations on how the operator was angling itself with the current wave of competition in voice calls from some rival networks that are offering cheaper rates.

“Call rates need to come down and Safaricom management seems to be adamant and is yet to react to the advertisements from other operators who are charging lesser costs,” said one shareholder.

On-net Safaricom calls cost Sh4 per minute, the same as Safaricom to other networks, and Sh2 on-net between 10pm and 6am, while the cost of calling Orange on-net costs Sh2 per minute and Sh3 per minute to other networks. Airtel charges Sh4 per minute on its default Vuka tariff for both on and off-net calls.

Safaricom also opposed the idea of separating the M-Pesa entity from the holding company, following an uproar by Airtel who had demanded that the operator be declared dominant since it holds more than 50 per cent of the industry’s market share.

“Each product is dependent on the other and cannot be separated,” said Safaricom chairman Nicholas Ng’ang’a, adding that the company’s directors, management and the regulator, Communications Authority, will consult further on the matter.

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