Mobile operators cut down investments - Mobile operators in Kenya last year cut down investment in the telecoms sector by Sh13 billion over reduced calling rates. According to the Communication Commission of Kenya, total investment in  the mobile sub-sector stood at Sh27 billion in 2010, down from Sh40 billion invested in 2009, a 32.6 per cent reduction.

The year 2010 saw mobile phone calling charges reducing drastically after Airtel Kenya, kicked off a vicious price war by slashing call charges across all networks to Sh3 and Sh1 for SMSs. This followed a move by CCK, the industry regulator, to cut interconnection rate by half to Sh2.21.

The move, though highly criticised by Safaricom and Orange led to massive price cuts by all the operators which eventually saw Safaricom, the largest operator, settle at Sh3 per minute on its network calls and Sh4 across network tariff. Mobile operator YU has been offering free calls within its network.

Safaricom and Telkom Kenya put out a continuous battle from late last year and through out to this year arguing that the continuous reductions were killing the industry. The two operators argued the low tariffs would discourage investment in the sector leading to loss of jobs and losses in taxes to the Kenya Revenue Authority. President Kibaki has since put a freeze on further reductions of charges by the CCK.

Yesterday, Safaricom, who last week increased its tariffs by Sh1, said they are investing Sh25 billion this year, up from Sh24 billion last year. "We have maintained our level of investment at Sh25 billion (Sh24 billion last year)," said chief executive Bob Collymore in a brief response to the Star. "We don't want to compromise the future investment in the business." Both Telkom Orange and Airtel had not responded by the time of going to press.

Peter Kiragu

Nairobi Star/06/10/2011