Business Daily: “Kenyan Telecoms Sector Way Ahead of its U.S. Counterpart”

From Washington Gikunju in the May 4 Business Daily

Kenya’s mobile phone industry is not only turning into a trailblazer in innovating new products, but is also very competitive and market driven.

Having spent the last six weeks in “the capital of the free market” as the US is often refered to, I realise that Kenyans may have grossly under-appreciated the relatively low price that they have to pay for connection to what I can now confidently describe as world-class mobile phone network service.

I will make my case by matching up the pricing structure of Kenya’s mobile phone services vis-a-vis the tariff plans in America.

Both countries have pre-paid and post-paid payment systems.

But while pre-paid calling cards are the overwhelming preference for Kenyans, most Americans are tied to post-paid contracts that range from anywhere between six months to two years.

Two service providers, Safaricom and Zain in Kenya and AT&T and Verizon Wireless in the US are market leaders.

But that is just about where the close comparisons end and the astonishing differences become apparent as day and night.

While it is generally quite easy for a Kenyan mobile phone user on both the pre-paid and post-paid plans to manage their monthly telephone bills by choosing from a wide range of tariff structures, Americans are forced to purchase pre-set tariff bundles.

It all starts at the point of purchasing a mobile phone handset. Kenyans walk into any mobile phone shop, buy a handset and acquire a SIM card from their preferred network provider.

They then decide whether to join pre-paid or post-paid billing plans. . . .

The last thing one would expect is that calling charges would be relatively more expensive in the US than they are in a developing country like Kenya.

Most Americans will not even think of making an international call because the charges are simply prohibitive, and involve either subscribing to a separate tariff plan or using tedious and highly priced calling cards.

Kenyans can call any part of the world for much less than Sh25 ($0.35) per minute just at the push of their call buttons.

The writing is on the wall, however, for the American mobile phone companies, internet-based calling services like Skype are literally taking over all long distance and international calls, denying them what would have been valuable revenue streams. . . .

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