Mobile firms jostle for space in data market

By Macharia Kamau

Telkom Kenya has increased the price of its daily-unlimited Internet bundle from Sh39 to Sh50.

The firm said the increase had been necessitated by investments it is pumping into its data infrastructure.

The increase is also part of the firm’s a bid to shore up revenues that have suffered following decline in call rates. The voice segment has been the pillar for the industry’s growth over time, but has come under intense pressure following fierce competition and is expected to flatten going forward.

Mobile phone operators are increasingly banking on data, short messages, value added services, and managed services to fuel their next growth phase.

Telkom Kenya Chief Executive, Mickael Ghossein, said despite the upward review in pricing, Orange still maintains the most attractive proposition in the market through its versatile Internet offers and high quality of service.

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“While we appreciate the positive uptake of our unlimited offering on this network by our customers, the increased level of investment and expansion that we have already begun has necessitated this change. This review took into consideration the quality of service that we offer to our customers vis-à-vis the cost of continued upgrade of our transmission backbones and networks,” Ghossein added.

Expand network

“Orange has so far invested Sh20 billion in building a robust mobile network in the country, and in the coming months we intend to invest a further Sh3 billion in order to expand our network further,” said Ghossein in a statement on Tuesday.

The firm said the price adjustments take effect on Tuesday, October 23.

Telkom Kenya also said it had simplified the process of purchasing bundles for its Internet customers. The new process harmonises Internet bundles and prices across all Orange networks. The firm operates different networks – Orange mobile, fixed wireless and fixed line.

Meanwhile, Safaricom has been running a promotion in the last few weeks to drive usage of its mobile money transfer service, M-Pesa, which in the 2011/2012 financial year, raked in Sh16.9 billion. The firm wants to increase use of other services that it offers alongside voice.

The short messages (SMS) business contributed Sh7.8 billion, which is equivalent to three per cent of the operator’s revenues of Sh107 billion.

Even though, the voice segment still contributes the lion share of its revenues, it is slowing down due to price wars. Voice business accounted for Sh68 billion, while data, which all players reckon will be the future, brought in Sh6.5 billion.

On Tuesday, Safaricom unveiled a Sh85 million promotion to encourage use of SMS. Dubbed ‘Bonyeza Ushinde na Safaricom’, the 60 day promotion will end with a lucky winner walking with a Sh10 million grand prize. In addition, four customers will scoop Sh2 million each in a fortnightly draw. There will also be 56 daily winners of Sh1 million each.

Growth

Safaricom Chief Executive, Bob Collymore, said the customer has been central to success of Safaricom.

“The growth of our company over the years has been achieved through a combination of well executed strategies and of course, our valued subscribers who are the pillars behind Safaricom,” he said.

Orange Kenya and Airtel are also eyeing a piece of the revenue, with their launch of third generation networks (3G). They are tempting subscribers to use their money transfer services – Orange Money and Airtel Money, respectively through cut in transaction costs.