But the runaway success of this venture is not making its rivals any happy. The competitors have been claiming that the sweetheart deals the Government has extended to Telkom Kenya-which amounts to an official subsidy-is giving this wholly-owned State firm unfair pricing advantages.
Things were not meant to be this easy for Telkom Kenya, a lumbering telecom giant that once held sway over corporate Kenya, but now with its voice business heavily cannibalized by global satellite mobile (GSM) phone providers, it has recently had to be given a bail out by State to pay off retirees.
Indeed, the wireless service, which is based on the Code Division Multiple Access (CDMA), enabled service, which is a rival to GSM, is essentially a gift from the Government, which negotiated a Sh20 billion loan from China to fund the infrastructure and thousands of free handsets from Huawei.
In February this year, as Telkom was preparing to launch the service, Mr Michael Joseph, the CEO of Safaricom-which is 60 per cent owned by Telkom-told the Business Daily that it would be difficult for the emerging CDMA operators to compete against the GSM operators because of the sheer volume of over six million subscribers calling on their networks.
"Who will you call," Mr Joseph said when asked whether the then nascent service posed a threat.
But this head-in-the-sand mentality is changing, as rivals come to terms with the extent of the threat posed by the local loop operators in the face of aggressive marketing by Telkom Kenya.
The national operator is pursuing individual customers in rural and urban areas and has struck a chord with cost conscious companies who are not oblivious to the benefits of the rock bottom tariffs on their bottom line.
Officially tagged as a government project to extend telephone reach across the country with Telkom Kenya as the implementing agency, the service is backed by Sh20 billion from China and the technical expertise of Huawei, a Chinese company.
Source: Business Daily
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