Investors Diary

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Tuesday, July 17, 2007

Price Wars at Telephony Industry

Cut throat competition:
It is now very evident that there is a cut throat competitition amongst the telephony industry players with everyone striving to remain relevant, absolutely cheaper and relatively preferable to the other party within the growing industry.

Celtel and Safaricom:
Earlier it had been evident that the two main players in the GSM commucation; Celtel and safaricom had been at loggereheads as price wars intensified. Safaricom with over 5M Subscribers recently made headlines with its substantial profit margins amounting to 17Billion, the only feat in this region of the world and may be quite unparalleled in Africa as well. Celtel on its part has close to 3M subscribers and is striving to increase that number marginally as well. Now Telkom Kenya has joined in the fray and is busy unveiling competitive tariff structures aimed at making the cost of telephony services affordable to the consumer.

New Tariffs:
The new tariffs launched by Telkom are: Furaha, Thamani and Shikamoo as well as a credit sharing service called Pasha as well as an SMS service.

CDMA Technology:
Telkom in its current onslaught on the industry is using the 3rd Generation System referred to as the Local Loop/CDMA i.e. Code Divisibole Multiple Access Technology. The Technology has 390M Subscribers and is currently used in 21 countries around the world.

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