An Airtel outlet in Nairobi. FILE PHOTO | NMG Airtel has signalled a new round of price war against Safaricom #ticker:SCOM as it looks to grow its market share locally.
Airtel Kenya’s parent company, Airtel Africa, said in a briefing on Wednesday it would not relent on the aggressive pricing practices that have seen it charge lower prices on both data and voice compared to its rivals.
Regulatory data show the telco’s share of Kenya’s voice traffic stood at 29.2 per cent in the three months to December compared to Safaricom’s 67.1 per cent.
Airtel has hinged its growth a low-cost pricing strategy to grow its voice traffic share from 12.1 per cent in March 2017.
“In Kenya, where we are a smaller player, our prices will continue to be a lot more aggressive than those of the leader, and we will try to keep that difference going forward,” said Airtel Africa managing director Raghunath Mandava on Wednesday.
He was speaking in a conference call with analysts and press during the release of the firm’s financial results for the full-year ended March 2020.
“The wider the market share gap like is the case in Kenya, the wider the pricing gap with the leader. Once the share gap reduces, then we will begin to see the pricing move closer,” he said.
Airtel charges Sh2 a minute to make calls to other networks and offers a daily charge of Sh10 for 100 minutes of on-net calls, costing the call at Sh0.10 a minute for the period.
Safaricom has an off-peak call tariff that charges Sh2 a minute for calls between 10pm and 6am, and charges for on-peak calls range between Sh2.86 and Sh4.30 a minute.
Safaricom last year introduced non-expiring bundles and also increased its data bundle sizes plan by more than 45 per cent for those purchasing bundles of up to Sh20 to capture a larger segment of the data market.
On the popular daily bundle segment, Airtel offers its customers two gigabytes of data for Sh99, valid for 24 hours, while Safaricom’s similar offering sees customers get one gigabyte of data.Other than the price wars on data and voice, Airtel has found it hard to penetrate the mobile money market, which is dominated by Safaricom’s M-Pesa that CA data showed accounts for a market share of 98.8 per cent.In its financials released Wednesday, Airtel Africa reported a 4.4 per cent drop in net profit to Sh43.2 billion ($408 million) […]
