Safaricom loses ground marginally in telecom sector as competition tightens

 

Safaricom Limited marginally lost ground to its competitors as the number of mobile phone subscribers in the country rose to 32.7 million subscribers in the first quarter of 2014/2015.

Current data from the industry regulator, Communications Authority of Kenya (CA) indicates the converged communication solutions provider lost 131,563 of its pre-paid mobile phone subscribers in the first quarter which saw its market share drop from 68 per cent to 66.7 per cent.

Airtel's market share increased to 16.5 per cent from 15.7 per cent recorded during the previous quarter with Telkom Kenya's (Orange) share increasing to 9.2 per cent from the previous 8.3 per cent, recording a 0.9 per cent gain. Essar Telecom's YuMobile that has since been bought out by Safaricom and Airtel saw its share decline by 0.4 per cent to reach 7.6 per cent from 8.0 per cent.

The industry report which covers the months of July to September 2014 comes hot in the heels of new allegations against Safaricom by Airtel that the former is abusing its powers as the dominant player in the market.

In a letter written to CA and Competitions Authority, Airtel wants regulatory intervention to stop Safaricom from sliding into a monopoly.

Recent figures from CA indicate that though Safaricom lost 0.6 per cent of its pre-paid subscribers, the company's post-paid subscriptions enjoyed a 10.1 per cent jump, recording 53,000 new subscriptions.

The company had last year terminated two of its post-paid calling tariffs on grounds that the returns from the Karibu post-paid tariff were not profitable.

New subscriptions were stopped and existing subscribers to the two tariffs currently paying a minimum of Sh1,000 and Sh2,500 per month given until May 26 this year to migrate to other tariffs. Safaricom has since stated the tariff is not discontinued and that the company is yet to make a decision on the matter.

"We haven't made a decision on that one yet and what we did last year was notify people that they can no longer join this tariff but in May we shall look at where we are currently standing and know the way forward," said Safaricom Chief Executive Officer Bob Collymore.

Post-paid subscribers

Airtel gained 6.9 per cent on pre-paid subscribers but lost 3.9 per cent of its post-paid subscribers with Telkom Kenya (Orange) gaining 12.6 per cent pre-paid subscribers and losing 9.2 per cent of its post-paid subscribers. Essar Telecom limited lost 2.7 per cent of its pre-paid subscriptions but registered 0.3 per cent additional post-paid subscribers.