Telkom Kenya defends its landline turf with lower CDMA charges

Telecoms

Telkom Kenya has moved to defend its landline turf which has been hit by stiff competition from mobile phones by slashing its tariff on the wireless network offered on CDMA technology by 71 per cent. Subscribers will now make calls for Sh2 per minute down from Sh7 per minute charged previously within the network. Calls from the CDMA wireless service to other networks will cost Sh4 per minute.

The telecoms company has also cut its SMS charges to Sh1 within network while to other networks will be billed at Sh2. Telkom Kenya CEO Mickael Ghossein said the move has been informed by the changing market dynamics and facilitated by the recent successful integration of the different platforms used to support all their telephony services. "This is part of our ongoing commitment to making communication affordable to all, irrespective of the time", Ghossein said.

The high cost of maintaining landlines, estimated at Sh2 billion annually and operate on copper cable prone to vandalism has limited Telkom Kenya from lowering its rates. The high calling rates has seen more consumers shift to cheaper options.

The number of fixed lines uses saw a decline of 0.5 per cent, having decreased to 245,791 in March 2009 down from 247,082 in December 2009. This was against the backdrop of increase in number of mobile users from 19.4 million to 19.9 million in the period under review, registering a growth of 2.7 per cent, statistics from Communication Commission of Kenya (CCK) indicate.

At the same time, the number of fixed wireless subscriptions experienced a decline of 41 per cent from 551,132 in December 2009 to 325,022 in March 2010. The new Orange fixed line tariffs will see a reduction in the cost of calling per minute from Sh14 to other networks to Sh12 per minute. Calls to other Orange fixed line handsets, Orange Wireless and Orange mobile will now be charged at Sh.6 per minute from the previous Sh7.

Telkom Kenya will also be offering 30 bonus on-net minutes for all post-paid fixed customers, with the new tariffs is a move at wooing customers. "The bonus minutes will be applied automatically and will be consumed before any billable minutes", he said.

The CEO also said that there has been a phenomenal increase in the number of new fixed line operators despite stiff competition from the mobile sector. Orange has in the past three months lowered its mobile calling tariffs and internet access costs. Orange is the only wireless service (CDMA) provider in the country so far, and dominates the fixed line market