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 Tuesday, August 31, 2010

Telkom Kenya, which operates Kenya’s smallest cellco by subscribers Orange Kenya, has become the fourth and final operator to enter the ‘price war’ that has dominated the wireless sector since regulator the Communications Commission of Kenya (CCK) cut its interconnection rates by 50% last week. Telkom has responded by reducing its own rates to KES2 (USD0.024) for calls within the Orange network, while calls to other networks will be charged at KES4 per minute, for both post- and pre-paid subscribers.

Meanwhile, when announcing the company’s new mobile tariffs, Telkom CEO Mickael Ghossein complained that the CCK had not consulted him before lowering the interconnection rates for fixed line services. Mr Ghossein commented: ‘We have taken issue with the CCK’s decision to set the interconnection rate for fixed lines with GSM at KES1.67, on the basis that it was too low to be sustainable and did not take into account running costs as well as network maintenance costs. We can easily close shop if we charge less than KES3 for off-net calls. The market is in a big mess. What other players are doing is not professional. My strategy is to sustain the company and grow revenues. Voice is dead, broadband is the future. At Telkom Kenya, with the enormous broadband resources we have, it is at our advantage as others fight.’ Telkom is the only operator licensed to provide fixed line services within the Kenyan wireline market.

Source: TeleGeography