Safaricom of Kenya Advances in Intraday Trading: Nairobi Mover
Safaricom Ltd. (SAFCOM) a unit of Vodafone Group Plc (VOD), advanced in intraday trading after Business Daily reported mobile-phone companies agreed a new rate for calls originating from each other’s network.
The shares of Kenya’s biggest mobile-phone company gained as much as 3.1 percent to 3.35 shillings before closing unchanged at 3.25 shillings in Nairobi, the capital. Markets were closed in Kenya on June 1 for a public holiday.
Kenya’s four mobile-phone companies agreed to cut the cost of calls originating from each other’s network to 1.60 shillings (2 cents) per minute from 2.21 shillings from July, Business Daily reported May 31. The agreed rate was a compromise after three of the companies and the industry regulator proposed a lower rate of 1.44 shillings, while Safaricom wanted a higher rate, the Nairobi-based newspaper said, citing Permanent Secretary in the Ministry of Information and Communications Bitange Ndemo.
The agreement “was not the ideal position for Safaricom but it was better than the initial proposal,” Eric Musau, a research analyst at Nairobi-based Standard Investment Bank Ltd., said in a phone interview today.
Francis Wangusi, acting Director-General of the industry regulator, said May 16 the so-called interconnection tariff would be reviewed in October when the Kenya Institute of Public Policy Research and Analysis completes a study of the effects of a reduction on the economy.
Mobile-phone companies in the East African country slashed voice-call rates after the regulator halved the interconnection tariff in August 2010.
Safaricom increased call charges last year for the first time in 11 years amid a weakening currency and accelerating inflation in East Africa’s biggest economy.
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