Traditional SMS defies WhatsApp influence

NAIROBI, KENYA: Mobile phone operators defied the wave of over-the-top (OTT) services such as WhatsApp to grow SMS in the second quarter of 2018.

According to the fourth quarter statistics report by the communications authority total on-net and off net messages stood at 66.8 billion marking an increase of 17.8 percent from the previous financial year.

“This growth is mainly attributed to the competitive retail SMS tariffs coupled with lucrative SMS bundles offered by the various mobile operators,” says Communications Authority of Kenya.

Messaging platforms such Facebook, Viber and WhatsApp let people make free calls and send short messages. Their wide use in Kenya elicited regulation debate in 2015 with local telcos seeing them as potential threat to their businesses.

The industry argued that OTT players avoid high licence fees paid locally, giving them unfair advantage.

Meanwhile the second quarter report released by Communications Authority of Kenya on Monday also painted positive outlook in the ICT sector. It says that the total revenue earned by mobile service providers increased by 8.5 per cent to Sh252.3 billion in the past twelve months to June 2018.

The figure is cumulative revenues from voice, data, SMS, mobile money transfer services, mobile termination rates, roaming charges, infrastructure leasing and handsets sales, among other services provided by mobile network  operators..

According to the report, voice still remains the dominant revenue generator at 41.7 per cent.  “It is evident that the revenue ratio of traditional mobile voice service is dominant at 41.7 percent of the total revenue,” read part of the report.

The value of investment made by operators rose to Sh41.52 billion in 2017/18 from Sh40.98 billion reported in 2016/17. The number of employees working in the mobile service sector increased from 6,907 reported last financial year to 7,016 in 2017/18.

While, the revenue from voice still contributes the largest portion of the total revenue, research predicts that data and mobile money services are more promising revenue streams for the mobile services providers in the future.   It probably explains heavy investments in the broadband infrastructure across the country and the quest for more financial inclusion.