by Jackson Okoth

The race for Kenya’s data market is set to intensify after mobile phone operator, Zain Kenya, acquired a new network licence.

Zain becomes the second operator, after Safaricom, to buy the 3G licence at a cost of Sh1.8 billion as mobile phone companies position themselves to cash in on expected boom in data business as Internet connectivity improves.

Also fuelling the shift to data has been the declining revenues in the voice market, triggered by a gradual fall in calling tariff charges.

"We shall be rolling out a 3G network in the first half of next year. The procurement process is already in place," said Zain Kenya CEO Rene Meza.

He said this on Wednesday, while launching the company’s new promotion campaign that will enable pre-paid customers make free calls and short message service. This service is limited to the Zain network, based on the amout of airtime topped up.

In recent months, data has been the key driver of top line growth for mobile phone companies, accounting for 50 per cent of revenue growth for Zain, coming mainly from its post-paid customers.

However, growth in the data business has been held back by the high spectrum costs. The price of a 3G licence is $25 million (Sh1.8 billion).

" We have been holding discussions with the regulator, who has agreed to review this price, to allow more players into the data market," said Meza.

Moreover, the economy shrinking to 1.7 per cent last year from 7.1 per cent the previous year has slowed down an aggressive expansion by mobile phone providers.

The mobile telephony market has also seen the entry of two more providers, setting off an intense price war that has driven down revenues in the voice business.

However, calling charges remain high even with the entry of more players into the mobile phone business. Zain is hopeful that the introduction of asymmetric connection concept will reduce call charges.