Mobile service operator Safaricom decided to increase its call charges in October by 25% after it recorded a huge drop of profits in the preceding months, a report by The Communications Commission of Kenya has revealed. This move by the leading mobile service provider to increase tariffs in October led to an 18 per cent drop in voice traffic within its network in the period September to December, contributing to a significant decline in the industry’s traffic.

In the three month period beginning September, a total of 6.7 billion mobile voice minutes were recorded down from 7.09 billion minutes of the previous period, representing a decline of 5.58 per cent during the period, the report says.

According to the report, on-net traffic declined by 10.78 per cent from 6.58 billion minutes in the previous period to 5.87 billion minutes recorded during the period under review. The decline was largely due to Safaricom Ltd that recorded 18.28 per cent decline in on-net traffic. Compared to the same period of the previous year, an increase of 15.60 per cent was recorded.

Safaricom charges Shs 4 within its network and Shs 5 to other networks up from Shs 3 and Shs 4 before October 2011. Orange mobile charges Sh2 for calls within its network and Sh4 to its rivals. Airtel and Yu are charge a flat rate of  Sh3 within and out of their network.

Safaricom's move to increase call rates saw it lose its share of the voice traffic market by 10 percentage points to 77 % as Airtel gained 6.24 percesuntage points to record 12.79 per cent market share from 6.55 % recorded during the previous period. Yu mobile grew its share to 8.53 per cent market from 4.58 per cent while Orange gained 0.22 percentage points to record 0.82 % cent market share from 0.60 %.

Consumers having been subjected to a fall of airtime costs from 0ver Shs 35 in 2003 to Shs 2 last year, felt the difference of Safaricom increasing its rate by Sh 1 and watched on what former Safaricom chief executive Michael Joseph termed as 'Kenyan's peculiar calling habits'.

See Report by CCK.