Safaricom has bowed to pressure of the competition. The company has  drastically reduced its SMS rates tto Ksh 2 across all local networks and Ksh 1 within its own network.  Safaricom CEO Bob Collymore said the reduced SMS rates are a permanent tariff proposition applicable to ALL PrePay and PostPay subscribers. CCK also issued new directive on interconnection rates with an implementation of Ksh 0.60 and reduce it to Ksh 0.05 by 2013.

“We are lowering the cost of sending text messages to any local network by giving our entire subscriber base an SMS rate of Kshs 1/- for Safaricom to Safaricom and Kshs 2/- for SMS’s from Safaricom to other local networks,” said Mr Collymore. With the new SMS rates, Safaricom subscribers will make savings of up to 71 per cent, when sending Safaricom to Safaricom SMS’s, and savings of up to 60 per cent when sending SMS’s to other local networks.

“The launch of this proposition takes into consideration our over 17 million subscribers, across the whole country, all having a variety of needs that must be addressed, and where possible, in uniformity. “In this increasingly competitive environment, Safaricom must continue to ensure that our customers’ needs are the central point of all our actions,” said Mr Collymore.

Previously, subscribers were paying Kshs 3.50/- for SMS’s sent within the Safaricom network and Kshs 5/- for SMSs sent to other local networks.

Safaricom had previously brushed off the price war taunts by competitors and also said that the rates by other providers were not sustainable. Mainstream media join the chorus of condemning other providers trying to engage in price wars.