Bharti Airtel two weeks ago fired the first salvo in the battle to wrest market share from Kenya’s dominant telecommunications player, Safaricom.

With slightly less than 10 per cent market share, Kenya’s second largest operator Zain, which Bharti bought recently, pales in comparison with Safaricom, which commands 80 per cent of the market.

Bharti, with its aggressive pricing, has thus started a war that none of the other players, Safaricom, Telkom Kenya or Essar has much stomach for at the moment.

Safaricom does not want a price war because it will affect its profit margins and its moneymaking machine.

Telkom Kenya has just completed a painful renegotiation with the government for subsidies that will help fund the business and a regulatory intervention that was supposed to level the competitive landscape.

The fog was just starting to clear in the mind of Telkom Kenya strategists before this war broke.
This could explain why Mikael Ghossein, the boss of Telkom Kenya, was making such fuss last week over the Communications Commission of Kenya’s allowing a lower interconnection rate on its fixed line network.

According to data from Synovate, Telkom spent $10 million last year advertising its Orange branded GSM network, which so far has attracted 552,294 subscribers — but of whom only 37,000 can be counted as unique.

Essar, the operator of the Yu brand, has been enjoying a quiet party luring teenagers to its network with the cheapest rates in the market.

So far, out of the 1.5 million people who use its network, it can only count 110,013 as unique customers. It too lowered its prices last week.

Bharti, which spent $8 million on advertising in 2009, has with its strategic move set Ksh3 (US cents 3.75) per minute as the industry standard.