Kenya: News Analysis: KES1 Orange to Orange Calls "not a Price War"

Wednesday, 08 October 2008

Just a generous offer to entice friends to try out the new Orange service, says Telkom Orange CEO Dominique Saint Jean. Is it going to impress consumers? Kenya’s mobile telecoms market keeps stirring, and for consumers, the party has only just begun: After its rebranding, former Celtel, now Zain, appears to have finally woken up and its KES8 per minute Vuka Tariff across all networks (Kenya: Press Release: Zain Kenya Lowers Charges Across Networks by 60% with New Vuka Tariff) , launched almost simultaneously to the market entry of Telkom Orange, has swayed even hardcore Safaricom purists. Orange’s strong point will be their integrated services offer and their customer care, they say, but the Vuka Tariff must have rattled them sufficiently to want to pull even: On 8 October, Telkom Orange announced a two-month period of KES1 per minute for all Orange to Orange mobile calls (Kenya: Press Releases: Telkom Kenya Announces Orange KES1 Offer ). Telkom Orange CEO Domique Saint Jean emphatically stated that the company does not want to enter into a price war, and that they merely want to entice more Kenyans to try out the new network: ‘In a competitive world, time if of the essence. The KES1 per minute offer will help us to fine-tune the network’. It is, Saint Jean said, ‘a welcoming offer’ to invite friends to use the Orange network. The Friends and Family tariff of KES3.5 to five selected numbers will stay the same. So far, Orange clients could call Orange mobile, Orange fixed plus or Telkom Fixed for KES7 per minute. Calls to other networks cost KES13. What exactly qualifies as a price war is a moot point. Of course KES1 is the currently lowest offer if one discounts the Safaricom free night talk time offer that had the troubling side effect of congesting the network to the point of it being unusable. Zain’s current offer for across-network calls of KES8 is probably still-more attractive, especially as they also have the KES65 tariff for unlimited talk time to Zain numbers from 6am to 6pm. Since many people already have two SIM cards for Safaricom and Zain, will they really bother of acquiring a third handset or switching between three different operators on a daily basis? At the press conference, Saint Jean was indeed asked whether Telkom Orange also had new handset offers, which he confirmed, but said it would be disclosed at a later stage. Given that many people will probably be reluctant to let go of their Safaricom and Zain numbers that most of their friends, family and business contacts already have, an attractive handset offer could probably have given a boost to the KES1 introduction. Irrespective of how this ‘non-price war’ unfolds, for Kenyan telecom clients this is a good time to lean back and watch the operators fight it out. Being backed by large telecoms groups, all three of them can certainly afford to throw some money at the Kenyan – and East African – market. And since Saint Jean insists that this is not a price war, how soon will they match the star products of their competitors? On both accounts, he was very guarded. Regarding the Orange Money transfer service, probably early 2009, although Telkom Orange, he emphasised, would have to be absolutely sure about security and reliability of the system. He also sidestepped a question whether Orange were in talks to take over Ugandan HITS whose license will expire shortly and who have not yet been able to roll out services. Reportedly this deal is about to be concluded. What transpired from the press conference is that Orange certainly have very ambitious plans, but that expectations in the Kenyan market are steadily rising, so that they are under pressure to match their competitors rapidly. Also read: Newcomer Orange to Break Safaricom’s Stronghold on Kenya’s Market? Share this article with others: Comments (0) Subscribe to this comment's feed Write comment Show/Hide comment form Name Email Title Comment smaller | bigger Subscribe via email (Registered users only) I have read and agree to the Terms of Usage. Add Comment