Telephone call tariff wars stimulate growth of Kenyan outsourcing firms

The Kenyan domestic BPO sector is witnessing rapid growth following the substantial reduction in call charges owing to ongoing price wars among the telecom firms in this east African nation.

A report quotes the country’s largest contract center Kencall chief executive Nicholas Nesbitt saying that his firm has been able to add two new domestic clients to its portfolio, including an insurance company and a bank, since the telecom companies began slashing their call tariffs. Stating that the reduced telecommunication charges were more realistic, Nesbitt asserted they were able to expand their client portfolio recently simply owing to the lower call charges offered by the firms now.

Recently, Zain, a major telecom player having presence in several African nations as well as the Middle East, announced a permanent reduction in its call tariffs by as much as 50 per cent, enabling the subscribers to make call across networks at just three shillings. The call price slash by Zain has prompted Essar Telecom Kenya, operating under the brand name Yu, to follow suit. Another telecom firm Safaricom was the next to join the bandwagon and offered non-net tariffs at two shillings, while the tariff for off-net calls was fixed at three shillings. More recently, Telekom Kenya also introduced an all time low permanent tariff of two shillings for on-net and four shillings for off-net calls.

Despite the slash in call tariffs, Nesbitt says that even now the call tariffs are twice as expensive for them to make domestic calls compared to calls made to a client’s customer in the United Kingdom. Nevertheless, he admitted that things were much better now. According to the Kencall CEO, the domestic customers of the company would be required to pay more for telephone call tariffs when they contracted out jobs to them than paying for the time of their staff. This is something absolutely absurd, he opined.

Interestingly, despite the expensive domestic call tariffs, the charges for international calls have been relatively cheaper since they are directed through satellite or fiber networks. In fact, the charge for a call to the US or the UK landlines for one minute is anything between Sh1.2 and Sh1.5, while the tariff is slightly higher for calls made to mobile phones.