East Africa: Safaricom Calling Rates Up By 20pc

Safaricom, Kenya's leading telecommunications operator by profits and subscriber numbers, raised its calling rates effective October 1 citing escalating operations costs occasioned by the weakening of the shilling against the dollar.The rate increase -- by US cents 1 across all tariffs -- is a sign that Safaricom is looking to maintain its profitability and is confident it will not lose market share despite increased competition in the sector.

Indian-owned Essar last week made permanent its offer of free calls within its Yu network in a move aimed at increasing subscriber numbers.Safaricom said its operating costs had been rising since the beginning of the year and had reached a level where they could not be sustained anymore."Due to the nature of our business, which is heavily reliant on both the regular importation of dollar-denominated capital equipment and a very high dependency on energy sources such as the national electricity grid and diesel fuel to power our extensive telecommunications network, we have seen our operational costs escalate month on month to what we now feel to be unsustainable levels in the context of our operating environment," Safaricom's chief executive Bob Collymore said.

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