Safaricom terminates post-paid calling tariff

Telecoms operator Safaricom on Monday terminated two of its post-paid calling tariffs, but retained current subscribers of the monthly billing service for one more year.

The telco cited losses in the Karibu post-paid tariff which had gained popularity in the past few months owing to its enticing bouquet for its over 140,000 retail clients.

Current individual subscribers will continue enjoying the service until May 26 2015 after which they will have the option of migrating to other tariffs.

“We would like to notify our customers that the Karibu PostPay bundles (1,000 and 2,500) have been discontinued and shall not be available to new customers with effect from Monday, 26th May, 2014,” read a notice from Safaricom in the dailies on Sunday.

The Karibu post-paid tariff has two price plans. For Sh1,000 per month, a subscriber gets 900 minutes talk time for on-net calls, 100 minutes for off-net calls, 100 megabytes of data and 100 on-net SMSes.

For the Sh2,500 per month package, subscribers get 2,200 minutes for Safaricom- to - Safaricom calls, 300 minutes to rival networks, 250 megabytes of data and 250 on-net text messages.

Chief executive Bob Collymore Sunday told the Business Daily that the company had received approval from the Communications Authority of Kenya (CAK) last week to cancel the service as the firm could not sustain it longer.

“The Karibu post-paid tariff was a promotional tariff whose time has lapsed,” said Mr Collymore on phone. “It was a loss making tariff.”

The low revenues from the tariff were attributable to the fact that subscribers on Karibu post-paid bundles pay less than one shilling per minute to make calls compared to Safaricom customers on pre-paid plans who are charged Sh4 per minute for calls made during peak hours (8am and 10pm).

Safaricom has, however, maintained other post-paid tariffs such as New Advantage, community phone and those for corporate clients.

Safaricom, which is the largest telecoms operator in Kenya by market size, introduced the post-paid service in 2011 in the midst of calling tariff wars in the industry.
Mr Collymore said that in the intervening period, the telco would come up with several new post-paid tariffs that would offer subscribers options.

“We will come up with new tariffs between now and next May to give the existing subscribers of Karibu tariff and new customers other options,” said Mr Collymore without mentioning whether the charges would increase or the service bouquet would shrink.

Local mobile operators have post-paid plans where payments are made once a month and a client gets a set mix of airtime, data bundles and text messages based on their monthly fee.

Industry data recently released by CAK shows that in the three months to December, Safaricom’s post-paid clients grew from 312,528 to 431,425, a 30 per cent growth.

During this three-month period, Airtel Kenya’s post-paid clients grew 4.5 per cent to 124,355 while yuMobile’s clients increased 18 per cent to 1,572.
Telkom Kenya saw its post-paid clients decrease by nine to 3,151.

CAK says that the country’s total post-paid subscriptions during the three months increased by nearly a quarter, signifying the growing popularity of this service.