I once sat down in a company meeting where the CEO told us that our company was so important that no one would let it go as the whole country would collapse...yada yada yada..Buy more shares!

The country was USA, the company was ENRON.

The next morning we were escorted by armed policemen out of our offices.

The lesson I learned is never believe anything coming out a CEO's mouth and there is no company so important in an economy that a major constitutional and economic crisis would ensue.

As usual we are mixing up issues.
Telecoms bring in kitu Ksh10bn tax revenue. The mbudget is now Ksh1trn which means they do diddly to tax revenue. I believe that we can

The cut in telecom prices is actually increasing the number and length of calls that we make. Therefore, although broadly mobile revenue will fall due to prices, it'll not fall by a straight line.

Extract from Nation by kisero

When the largest company on the Nairobi Stock Exchange, by market capitalisation, issues a price warning, the reverberations will be felt through the length and breadth of the capital markets.
At the end of the day, what we are dealing with is weak competition regulation. Indeed, the regulatory regime is still in its infancy. As a country, we still have very little experience and capacity in this area.
If you scrutinise the ways the laws have been crafted, you will realise the orientation of the writers of the regulations governing competition in the industry was mainly to tackle abuse of market power by the dominant player.
By bringing prices to Sh1 per minute, Airtel has committed no sin because it is not the dominant player. After all, all tariffs are approved by the government.
According to the latest study by Analysys Mason, the cost of making a mobile telephone call in Kenya is Sh1.72 per minute exclusive of taxes.
If Safaricom was the one driving prices downwards to Sh1 per minute, according to our laws and regulations, it would have been accused of engaging in predatory pricing because it is the dominant market player.
Well-informed regulation promotes growth, capital accumulation and job-creation. The mobile phone companies cannot be blamed for engaging in price wars. The culprit is the government.

Where did I mention Safcom above? I thinkwe are getting carried quite a bit here.
Are subscirber numbers being reduced or increased? The answer is they are being increased. Will Kenyans talk more often and for longer? The answer is yes-yes.
The telecom industry has to evolve and actually move into broadening its revenue base to include money transfer; internet; m-commerce which they are elready doing.

The trend of lower arpu is worldwide not just Kenyan based.
Airtel wants to increase its subscriber base and there is no better to do it than to reduce prices.

@Waithaka, based on the current situation and facts your arguments are all wrong, ARPU dropped with the cutting of prices and airtel did not get new subscribers, in fact they eventually lost a number of them, research posted here earlier shows they are lying, i have not received a single airtel call this year and i cant remember for how long, maybe others have but i have not. They have just been giving away free simcards and calling them subscribers thats all, and most will attest to this.