Telkom Kenya raises stakes in data market with Sh1 per MB plan
Telkom Kenya on Wednesday revised its Internet charges downwards, raising the stakes in the battle for control of the data market which is expected to be the next frontier of revenue growth for telecoms firms. Subscribers will pay Sh1 per megabyte (MB), one of the lowest Internet tariffs currently on offer from a telecom firm.
Previously, the company charged from Sh2 or more per MB depending on the Internet bundle a customer opted for. The Sh1 per MB rate will will apply for buyers of the 4 gigabyte (GB) bundle which will be priced at Sh3,900.
Other providers of low-cost Internet are Access Kenya, which charges Sh1 per MB for its home Internet services. Mickael Ghossein, CEO Telkom Kenya, said the price cut is meant to reposition the company in the data market in which it was a key player before the liberalisation of the ICT sector ushered in competition that has since eaten into the firm’s market share.
Rival mobile operators have reacted to Telkom’s move by acknowledging the increase in competition in the sector. “Of course we expect a lot of competition and tariffs will have to fall to reflect this. In the long run, however, you have to consider the issue of customer experience and you also need a critical subscriber base to create a sustainable business model,” said Chris Tiffin, Safaricom’s Chief Financial Officer.
Telkom is targeting both corporate and individual clients with the reduced prices.
The regulatory stance taken by the government recently may also lead to a reduction in revenues gleaned for the voice market. Last month, prime minister Raila Odinga ordered a review of mobile call charges saying they were too high and not a true reflection of international trends.
As Telkom was announcing its new charges, Safaricom and Equity bank were also unveiling a partnership in which the bank will offer loans to the public for the purchase of laptops while the mobile phone operator will supply Internet modems to the laptop owners.