[2008-09-17]  Safaricom and Telkom in joint service deal
Safaricom has signed an agreement with Telkom-Kenya allowing its subscribers easy access to the Orange network to be launched today.

Telkom is set to become the third mobile phone services provider when President Kibaki launches its Orange brand at KICC, Wednesday morning.

The move is seen as a strategy by Safaricom to consolidate its position in readiness for stiff competition from Econet Wireless and the rebranded Zain that has pledged to invest billions of shillings for expansion and network upgrade.

Telkom owned 60 per cent stake at Safaricom on behalf of Government until last year when it relinquished the stake to the State that went ahead to sell 25 per cent shareholding to the public, through the Nairobi Stock Exchange.

Last year, the Government sold 51 per cent stake at Telkom Kenya to French Telkom that now controls the company, which is the only fixed-line operator. Safaricom CEO, Michael Joseph welcomed Telkom’s entry into mobile telephony, saying it would heighten competition that would benefit subscribers through cheaper charges.

"Competition will benefit the public as existing operators will strive to improve their service offerings," Joseph said after signing the agreement. "The interconnection agreement would help ensure fair play among the competitors in the sector, provide for the speedy resolution of inter-operator differences and ensure high quality to service between the respective networks."

Under the agreement, the two companies have agreed on Sh5.27 per minute interconnectivity fee, which means they would pay one another that amount when subscribers call across the networks.

interconnectivity fee

This is far below the maximum Sh30 a minute interconnectivity fee set by the Communications Commission of Kenya, mid last year.

Before venturing into mobile telephony, Telkom was operating Telkom Wireless on a CDMA network and expects the shift to GSM to boost its profile in the cellular market.

Safaricom and Telkom already have an interconnection agreement for fixed line services.

The agreement will see the operator foster its grip on subscribers and prevent migration to competition including Zain and Econet Wireless, expected to roll out its operations in November.
Source: (C) 2008 THE STANDARD