Telkom takes aim at Safaricom with new Internet deal

Telkom Kenya has introduced a cheaper unlimited Internet access tariff in an effort to curb the growing dominance of Safaricom in the mobile data market.

The firm said yesterday it would charge its mobile Internet subscribers based on the period of use rather than data capacity with consumers paying Sh39 daily, Sh249 weekly and Sh990 monthly on their mobile phone.

Those using 3G modems would be charged Sh990 and Sh2,990 weekly and monthly respectively.

The review of pricing structure targets heavy Internet users.

This has put Telkom Kenya in the same breath as Safaricom, which has used the unlimited pricing structure to gain marketshare.

It charges Sh1,000 a week and Sh3,000 monthly for unlimited Internet access.

“We are positioning ourselves for subscribers who would like to use applications that require heavy Internet capacity such as e-commerce and e-health,” said Telkom Kenya chief executive officer Mickael Ghossein.

He added that the current trend shows that mobile Internet is the future and heavy users prefer unlimited packages.  

Previously, it charged its subscribers on mobile phones Sh100 for 50MB and Sh750 for 1GB while those on 3G modem were paying Sh100 for 50MBS and Sh7,990 for 20GB.

The Internet market is becoming important for the mobile telephony firms that have seen a vicious price war cut earnings in the voice segment.

The cost of airtime has more than halved since August 2010 and this has seen consumers call budget fall by a similar margin.

As a result, the operators are increasingly looking to the data market for growth, sparking a price war in this segment of the telecoms business.

Data from the Communications Commission of Kenya show that 14.3 million Kenyans had access of the Internet in the period to September up from 8.6 million in September 2010 — pushing Internet penetration to 36.3 per cent from 22.1 per cent.

However, subscribers accessing Internet through mobile phones stood at 5.3 million in September.

The unlimited tariff along with Safaricom’s wide subscriber base has seen it tighten its grip of the mobile Internet market akin to its dominance in the voice segment.