Safaricom’s bid to limit users meets opposition

Corporate News

Safaricom CEO Bob Collymore. The firm has given its Karibu postpaid users until May 26 to clear the unused units. PHOTO | FILE 

By MUGAMBI MUTEGI, pmutegi@ke.nationmedia.com

In Summary

• News of Safaricom’s decision to limit use of bundles saw some users threaten to take the telecom operator to court for what they claimed is a violation of their rights.
• The main bone of contention for the more than 150,000 subscribers is that Safaricom is limiting use of bundles they paid for and should be allowed to consume at their own pace.
• Safaricom CEO Bob Collymore described the Karibu tariff as promotional, revealing that it has been loss-making since its launch.

Telecoms operator Safaricom’s attempt to have its post-paid tariff users use up their accumulated airtime, SMS credits and data in one month on Thursday met stiff opposition from consumers who complained that the move amounted to a breach of contract.

Safaricom had, in notices published in local newspapers, given its Karibu postpaid users until May 26 to clear the unused units. The company also said any units not utilised within a month of issuance will cease rolling over as is currently the practice.

The main bone of contention for the more than 150,000 subscribers is that Safaricom is limiting use of bundles they paid for and should be allowed to consume at their own pace.

“Safaricom should let its clients enjoy what they paid for to the fullest. They may have right to stop accumulating beginning May 26 but accumulated resources cannot be expired,” said Collins Otieno, a subscriber.

The changes were aimed at propping up Safaricom’s balance sheet which has been feeling the weight of rewards schemes such as Bonga Points, which are accounted for as liabilities in its books and are only recognised as income upon redemption by customers.

Unused resources on the Karibu tariff are estimated to be valued at hundreds of millions of shillings.

News of Safaricom’s decision to limit use of the services saw some users threaten to take the telecom operator to court for what they claimed is a violation of their rights. The Karibu tariff which was introduced in 2011 has two price plans.

For Sh1,000 per month, a subscriber gets 900 minutes talk time for on-net calls, 100 minutes for off-net calls, 100 megabytes of data and 100 on-net SMSes.

For the Sh2,500 per month package, subscribers get 2,200 minutes for Safaricom-to-Safaricom calls, 300 minutes to rival networks, 250 megabytes of data and 250 on-net text messages.

Users who do not use all of these services within 30 days of receiving them can still access them since they are rolled over to the next month when a fresh bundle is issued.

READ: Safaricom changes to Karibu post-pay tariff plans revealed

Early adopters, therefore, have accumulated hundreds of thousands of minutes, SMS units and data bundles whose growing value has become a headache to Safaricom.

The current backlash is the culmination of a year of twists and turns for Safaricom, which has been seeking a way to put users of the tariff plan on a profitable path.

On May 25 last year, the telecom announced it had ceased accepting new subscribers for the postpaid plan, adding that it was going to terminate the plan a year later upon receiving regulatory approval.

Safaricom CEO Bob Collymore described the Karibu tariff as promotional, revealing that it has been loss-making since its launch.