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Airtel Geared for Fresh Price Wars With Safaricom

[IMAGE/ COURTESY]

Airtel is prepared for a new round of price wars with Safaricom as it looks to increase its local market share.

Airtel Africa, Airtel Kenya’s parent company, said in a briefing that it was not going to relent on the aggressive pricing practices that have resulted in it charging lower prices on data and voice, in comparison to its competitors.

According to regulatory data, the telco’s share of Kenya’s voice traffic stood at 29.2 percent in the three months leading to December compared to Safaricom’s 67.1 percent.

Read: Competition Tribunal Eases Merger Conditions For Airtel and Telkom

Airtel has used the low cost strategy to grow its voice traffic share from 12.1 percent 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 Raghunath Mandava, Airtel Africa Managing director.

Mandava was speaking in a conference call with analysts during the release of the company’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 currently charges Sh2 per minute to make calls to other networks and offers a daily charge of sh10 for 100 minutes of on-net calls, translating to Sh0.10 a minute for the period.

Read: Airtel Kenya Donates PPE to COVID-19 Health Workers

In comparison, Safaricom has an off-peak call tariff that charges Sh2 a minute for calls between 10pm and 6am while the peak rates range between Sh2.86 and 4.30 a minute.

Last year, Safaricom introduced bundles without expiry and increased the data bundle sizes plan by more than 45 percent for anyone purchasing more than Sh20 of data in a bid to capture the larger data market.

On daily data, Airtel offers 2GB data at sh99 valid for 24hrs while Safaricom offers 1GB for 24hrs, for the same cost.

Apart from price wars on data and voice, Airtel has found it hard to capture the mobile money market which is dominated by M-pesa from Safaricom which dominates the market at a share of 98.8 percent.

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Written by Vanessa Murrey

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