End of price wars could benefit Orange and Yu

The much publicized price war between mobile services provider Zain and Safaricom finally came to an end this week after Zain adjusted its tariffs up.

Safaricom dismissed Zain's campaign to woo subscribers saying that the profits are more important than the price war. It seems Zain has taken a lesson from that.

This may now be a chance for Yu and Orange to take advantage of the subscribers in search of lower calling rates. It is common that in Africa people are not afraid to carry two phones or SIM cards if it means making savings on the calls.

Orange captured its millionth customer this week and from the look of things; the company can capture more subscribers by lowering the cross network calls.

Orange has the one shilling per minute on intra-network calls, which is good but the company can do better with lower cross network charges. Maybe they can come up with their own campaign inviting subscribers to cross over.

On the other hand, Yu offers 75 cents per minute intra-network calls and looks like its change of name from Econet Wireless to Essar Telecom Kenya has given it financial cushion to weather loses for a few years before it can break even.

Maybe we should see a fresh wave of price war, this time between Orange and Yu but this time on cross network calls. The two companies have the chance to change the dominance by capturing the low spending market.

There is no doubt that for cross network calls to go down, the Communications Commission of Kenya needs to further reduce the cost of call termination between networks. The report submitted a few years back pegged the termination cost between 4 and 5 shillings, it is time that the costs were reviewed.

Whether Orange and Yu are able to dent Safaricom and Zain's market dominance, it will depend on the actions taken from now on.The lowest charges will definitely put a smile on our faces.

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