Kenyans made Sh870b phone deals in 3 months

Kenyans transacted close to a trillion shillings on their mobile phones in the first three months of 2016, as cash-less economy slowly takes root in the country.

According to the latest figures from the Communications Authority of Kenya (CA), the value of mobile money transactions between January and March this year stood at a whopping Sh840.3 billion.

Of this, money transacted through Safaricom’s mobile transfer service M-Pesa was valued at Sh764.7 billion, or about 90 per cent of the total cash transacted.

This means that about 13 per cent of the country’s gross domestic product (GDP) went through M-Pesa as the country’s economy slowly goes cash-less.

Safaricom’s 2015 net profit of Sh38 billion is also said to exceed what the entire insurance industry made, with many analysts describing the firm as a mega company.

But even as M-Pesa tightened its grip on the country’s mobile money service, the new kid on the block, Equity Bank’s Equitel Money, leap-frogged Airtel Kenya as the second largest mobile money transfer service.

According to CA’s quarterly statistic report, Equitel customers managed to transact about Sh62.4 billion in the first three months of 2016 against Airtel Kenya’s Sh12.3 billion.

Equitel Money, a mobile virtual network operator of (MVNO) which uses a thin-sim card that can be superimposed on another operator’s sim-card, has made clear its intention to give M-Pesa a run for its money.

There was a sharp increase in the number of people that sought mobile money transfer services in this period as parents and guardians settled their children's school fees using mobile money service, according to the CA.

“The person-to-person transfers stood at Sh396.7 billion as at the end of the quarter under review. Overall, there was increased activity in the mobile money during the period and this was attributed to the busy back-to-school season during which parents and guardians actively deposited, transferred, withdrew, paid school fees and purchased other goods and services using this platform due to its reliable and convenient nature,” read the report.

And with most Kenyans using their mobile phones to shop, pay such bills as water, electricity and for PayTV subscriptions, there was an increase in mobile commerce transactions with people buying goods and services worth Sh312 billion through their mobile phones.

Safaricom’s mobile commerce transactions stood at Sh286.6 billion, about 91 per cent of all the mobile commerce transactions.

The telco also retained its iron-grip on the other segments of telecommunication services controlling 77 per cent of the sector’s voice market, up from 72 per cent in the same period last year.

Airtel Kenya’s market share in voice declined to 14.5 per cent in the period under review from 21 per cent last year. Orange, which has since been acquired by British private equity firm Helios, had 8.3 per cent.

However, in both short-messaging service (SMS) and internet data, Airtel Kenya gained where Safaricom lost.

The report does not say why Safaricom lost in the SMS segment, though some people might speculate that such services as Whatsapp that have become very popular among young people might be the reason.

In the SMS market segment, Safaricom relinquished 1.7 percentage points of its market share to Airtel to remain with 89.9, down from 91.6 per cent between January and March 2015. As a result, Airtel’s market share increased from 6.9 per cent to 8.8 per cent as the texting competition heated up.

On internet data, Safaricom, though retaining the lion's share of the market, lost ground to Airtel in the period under review. Safaricom lost 2.2 percentage points compared to the previous quarter.

Airtel gained 3.1 percentage points to record 21.1 percentage points as internet data turns into the next battleground between the country’s telecommunication giants.

Interestingly, between December 2015 and the same period in 2014, about 7.4 million more Kenyans got mobile subscriptions as uptake of smartphones went up.

Orange Kenya lost 2.8 percentage points to record 11.2 per cent market shares. Kenyans’ appetite for mobile phone has barely waned with 3.5 million more mobile subscriptions in the period compared to the same period a year before.

Between January and March 2016, there were 38.3 million subscriptions, up from 37.7 million registered in December 2015.