Nairobi — Kenya's only operating local loop operator, Flashcom Ltd, has joined the telephony market price war frenzy, by cutting its calling and internet rates.

The introduction of the unified licensing framework (ULF) by the industry regulator, the Communications Commission of Kenya, gave the firm a fighting chance, rendering the local loop operator concept void.

Local loop operators (LLOs) are companies licensed to provide end-users with voice and data, in specific geographical regions.

Flashcom, with its coverage mainly in Nairobi and environs, last week cut its calling rates to Sh2.40 per minute to all other networks in Kenya, while calls and short messages within the firm's network are free.

International destinations start from Sh7. Data costs Sh1,999 for unlimited monthly use. It is charged Sh0.5 per minute on all tariffs.

"We are basically the cheapest in the market," Mr Julius Kinyua, Flashcom's chief execut

ive says.

Mr Kinyua says the price war is both good and bad for the industry. He says smaller players, can now acquire more subscribers and receive more traffic due to low cross-network tariffs.

This way, consumers enjoy more value for money and do not have to worry which network they call.

"This has eliminated the 'club-effect' where users were forced to join the network with the largest number of subscribers," he says.