As much as low tariffs are good, lets try to look at the bigger picture:

1 - All the airtime dealers (and I do not mean distributors)...the guys who get 5% of the value of cards they sell...are hurting...they are moving almost half the volumes. Take a regular kiosk person, who would sell 100 cards of Kshs 20 each every day (total = 2000 and 5% = Kshs 100). His daily profit is now Kshs 50.

2 - Telkom Kenya - is still partly government owned. The price wars are killing its mobile subsidiary Orange and this goes against fair competition practices. never mind the debacle regarding Telkom's assets. This price war will invariably kill Orange. Fixed lines are not worth much revenue - its mobile.

3 - A bit of a lecture on telco market liberalisation to explain where we came from: Lets think back to KPTC (and other similar state corporations from other countries). The liberalisation and privatisation wave started in Africa in the mid 90s. In Kenya this started around 97-98. Ideally what should happen, after unbundling the entity (into three parts - an independent regulator, a postal operator and a national telco), if for the ensuing telco to undergo a "strengthening" process to prepare it for competition. This process would typically be given to an experienced player as a management contract and would entail improving processes, staff cuts, etc etc - to make it a lean and mean operation capable of holding its own against private operators.

As soon as this happens - perhaps after a year or two, then it could be PRIVATISED or partially privatised to allow for fresh capital injection and make it somewhat autonomous of government.

After this, THEN they could licence additional operators to compete with it - protecting national interests and ensuring a level playing field.

In Kenya this process was so BOTCHED and F--KED up in the 90s and early 00s. Telkom Kenya should ideally have been partially privatised at the same time as Kencell and Safaricom were licenced. It should have divested from Safaricom and got its own mobile licence (as has now happened in RSA with telkom south africa).

So, long and short, we are paying to price for political interference and vested interests that played out in the late 90s and early 00s.

Telkom Kenya must now be protected and not allowed to atrophy.

Djinn, why must Telkom Kenya be protected? Pls explain. I don't understand.

Telkom Kenya must be protected my bad!....Do i care if they closed shop yesterday?

Mr. PANICKY;
“These prices are not sustainable. While we expected the prices to drop, we did not expect by such a large margin,” said Michael Joseph, outgoing Safaricom CEO

"Telkom Kenya must be protected...." Please explain why again?Those are the same guys who were so arrogant for all those years they could have used to get ahead in the game.Why should we pay for their mistakes?