Most players are making a move for avoiding the need to drastically reduce tariffs that will be inevitable as the new guidelines are implemented.
After 6 years of declining costs, fixed and mobile line service providers will be finally imparting the savings to customers in Kenya.
The reduced tariffs have been encouraged by plans of new rules to come into effect from 1st March 2007. These rules, according to insiders, can help in reducing costs of making telephone calls by about 50%.
The 2nd week of December 2006 observed the first actual reduction in airtime charges in a short time. But as the industry is recognized for reshuffling instead of cutting costs, it took some a hit to identify the implications of new rates.
In Kenya, it's comparatively cheaper to make international calls than local. For long, the rates of local interconnection have been very high, making calls to a mobile phone in China or US or much cheaper than call between two local networks. This irregular situation of having costly local calls than international ones is expected to change soon.
CCK (Communications Commission of Kenya) rules require network operators to negotiate business charges that aren't discriminatory i.e. charge all of their competitors same rate.
"The key reason behind reduction in telephony costs in Kenya is telephony tariffs' flattening, rising moves towards flat-rate pricing, since telephony's marginal cost goes further downwards and traffic among providers has also been low due to high tariffs imposed on inter-mobile traffic", said by an analyst at RNCOS.
To meet the economic needs, expansion of network, enhancement of service quality & features, and up gradation of operational productivity and efficiency are requisite. Kenya has one of the highest population growth rates in the world and the economy of the country is expanding at a rapid pace.
Broadening the scope & improving the quality of telecom services offered to urban as well as rural businesses results in economic benefits much beyond costs that are incurred.
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