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Safaricom fights Telkom advert in market share war [Business Daily (Kenya)]
[February 23, 2014]

Safaricom fights Telkom advert in market share war [Business Daily (Kenya)]

(Business Daily (Kenya) Via Acquire Media NewsEdge) Safaricom's creative and media agency, Scanad, has lodged a complaint against rival Telkom Kenya's advertisement, underlining the intense battle for market share between mobile phone operators.

Scanad has petitioned the Advertising Standards Body of Kenya (ASBK) to take action on Orange for aggressive advertising that has involved use of Safaricom's SIM cards, call rates and corporate colours to market its own services.

The agency wants ASBK to compel Orange to withdraw the advertisements, which are meant to lure Safaricom subscribers to Telkom.

Telkom Kenya went on the war path last month in a commercial that uses a green SIM card similar to those of Safaricom to depict the rival as the most expensive network while using its orange corporate colour to show its network as the cheapest.

"It's more affordable to call other networks from Orange than calling within that network. So get an Orange line," says Telkom Kenya in the advertisement that began running from January 8.

Telkom Kenya CEO Mickael Ghossein said on Friday Safaricom has faulted the promotion and called for its withdrawal.

"In the advert our key massage is for the consumer to make a decision by comparing our tariffs with what our rivals are charging and we not targeting Safaricom as they claim.  Kenya is a multi SIM card market," said Mr Ghossein.

Telkom shows that calls from Safaricom are pegged at Sh4 a minute while it charges Sh3 to reach rival networks and Sh2 between its subscribers.

Orange's creative agency is handled by AccessLeo while Safaricom's is done by Scanad, an affiliate of Scangroup.

Kenya's commercial law is silent on this type of advertising, leaving Safaricom in a difficult position that it has tried to navigate by complaining to the advertiser's body.

ASBK was formed in 2003 by players in the marketing and advertising sector to guard against false, negative, and obscene advertisements as well as offending commercials from competitors.

The row echoes the 2010 dispute pitting Safaricom against Airtel, which triggered deep cuts in text message and call costs.

Airtel adopted "the best option" slogan that Safaricom saw as shaving too close to its "better option" mantra.

It urged consumers not to pay up to five times more for an SMS in an advertisement dubbed "Be the Judge" by placing Safaricom's charges against its own on a weighing scale that gave more weight its rival's charges.

Airtel's campaign has included jibes at Safaricom with a declaration that "Going green is not always the better option..." taking from Safaricom's marketing slogan "the Better Option," and its corporate green colour.

But ASBK verdicts have no legal backing, but the body can force companies to withdraw advertisement.

In 2006, for instance, ASBK ruled that alcohol advertisements in the electronic media could only run after 8pm in a case pitting National Authority for the Campaign against Alcohol and Drug Abuse against beer brewers and distillers.

Marketing experts said the Telkom Kenya campaign is using a targeted communication strategy that focuses on the negative attributes of a competitor and their products, rather than emphasising on one's own positive attributes or preferred qualities.

"In a fairly conservative culture like Kenya's, one would rather speak more about their brands than focus on the competitor's weaknesses," said marketing consultant who sought anonymity.

Orange had the lowest number of subscribers at 2.2 million in September, compared to Safaricom's 20.8 million. Airtel and Yu have 5.5 million and 2.7 million subscribers respectively.

Orange wants to gain market share to turnaround the loss making operation that is owed 70 per cent by France Telecom.

Pricing of calls has failed to alter market shares, prompting Airtel and Yu to abandon their budget business model, which prompted the halving of tariffs in 2010.

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