Airtel loses 5 million mobile money users in three months

Airtel shop along Kenyatta Avenue. (Photo: Willis Awandu/Standard)

Telecommunications firm Airtel Kenya lost a massive five million mobile money subscribers in just three months to March 2017, latest figures from the industry regulator show.

Communications Authority of Kenya (CA) says the operator is now left with 1.7 million subscribers compared to 6.7 million customers it had registered by end of December 2016. This is nearly three quarters (74 per cent) of what the mobile operator had as at the end of December 2016, casting doubts on the future of the firm in the market where the industry is increasingly being driven by mobile banking.

Airtel Kenya, which is owned by Indian tycoon Sunil Bharti Mittal, also lost half a million customers on its voice and data network during the quarter.

The firm’s subscribers stood at 6.3 million in March, a decline from 6.8 million in December, which the regulator attributed to the revision of a popular offering by the operator resulting in customers slowing down on use of its products.

The decline in the number of Airtel Money customers had an effect on the overall number of people using the now popular mobile money platforms to send and receive money as well as pay for goods and services.

In a new report, CA said the number of mobile money subscribers reduced to 27.5 million by end of March from 31.9 million in December last year.

“Airtel Networks Limited registered a decline of 6.7 per cent in the number of mobile subscriptions to post 6.3 million from 6.8 million subscriptions recorded in the previous quarter. This could be attributed to the review of a tariff carried out by the service provider which led to reduction in new acquisitions and increased subscriber inactivity,” said CA in a quarterly telecommunications industry report.

This in turn resulted in the operator’s market share going down by 1.3 percentage points to 16.3 per cent from 17.6 per cent posted during the preceding quarter.

Responding to a query from Weekend Business on the sharp decline in the number of Airtel customers, CA said the firm had been giving false information on its subscriber numbers. “During the quarter, the data submitted by the operator showed some discrepancies where the number of mobile money subscriptions were higher than their overall number of mobile subscribers which should not be the case,” said CA.

Gifting Safaricom

“Upon more clarification by the Authority, the operator re-submitted their data based on a revenue generating period which is 90 days. This then resulted in drastic drop in their mobile money statistics during the period.”

Also on the decline has been Telkom Kenya, whose share of the market dropped by 0.2 percentage points to 7.2 per cent from 7.4 per cent recorded during the previous quarter.

The firm, which early last month shed the brand of its previous owner Orange, had 2.8 million customers as of March, a 3.2 per cent decline from 2.89 million in December last year.

The two operators appear to be gifting Safaricom more customers, with the telco now commanding 71.9 per cent of the market share with 28.1 million customers. The company has over the last year grown its market share, moving from 65.2 per cent in March 2016.

The huge subscriber base has resulted in the company being deemed as dominant. A yet to be published report on dominance in the sector, commissioned by CA and conducted by Analysys Mason, made such recommendations as making mobile money platforms owned by different operators interoperable and sharing infrastructure in a bid to reduce barriers by small firms trying to make inroads in the telecoms sector.

The two operators – Airtel and Telkom – also ceded market share to recent entrants in the industry. Such include Finserve – Equity Bank’s subsidiary that operates Equitel –  whose market share grew to 4.4 per cent in March, from 3.8 per cent in December.

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