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Bharti’s Nigerian Unit Cuts Mobile-Phone Call Rate 50%

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Dec. 2 (Bloomberg) -- Bharti Airtel Ltd.’s Nigerian unit cut its mobile-phone call rate by 50 percent in a bid to attract customers from rivals six months after entering Africa’s biggest telecommunications market.

The move is in line with the company’s policy to reduce costs for customers, Rajan Swaroop, chief executive officer of Airtel Nigeria, said in an e-mailed statement late yesterday. The rate was cut to 12 naira ($0.08) a minute from 24 naira, according to information on its website.

Bharti bought the African assets of Zain, Kuwait’s largest phone operator, in June for $9 billion in the second-biggest overseas acquisition by an Indian company. Nigeria, Africa’s most populous country, has more than 80 million active mobile-phone subscribers, according to its telecommunications regulator.

“If you’re coming into an immature market like ours, you must do something to entice subscribers,” Titi Omo-Ettu, president of the Association of Telecom Companies of Nigeria, said today in a phone interview. “The volume of business they want to do allows them to undercut everybody.”

Competitors are likely to react quickly, said Omo-Ettu. In Nigeria, “where some people carry four handsets because of poor quality, if you don’t react, there’ll be a run on you.”

Bharti’s Lagos-based unit competes with market leader MTN Nigeria Communication Ltd., a unit of South Africa’s MTN Group Ltd., and Globacom Ltd. in Nigeria. Wale Goodluck, head of regulatory corporate services at MTN in Nigeria, declined to comment.

To get the reduced rate, Bharti subscribers must pay a daily fee of 36 naira. The rate cut is the first of a series of initiatives it will introduce in Nigeria to “redefine” the country’s telecommunications business, Bharti said.

To contact the reporter on this story: Paul Okolo in Abuja at pokolo@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net.