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Telco takes on giants for share of roaming profits

By Dominic Omondi | February 2nd 2016 at 00:00:00 GMT +0300

A telecommunications firm eyeing Kenya’s millions of roaming traffic minutes appears to be spoiling for a price war.

Telco Partners operates a SIM card that enables users pay between 55 per cent and 95 per cent less when roaming than what is charged by the country’s main mobile service providers.

Roaming allows a subscriber to continue accessing voice, data and SMS services when outside the geographical coverage of a home network.

Telco Partners’ SIM card — called Sweet Roaming — is a global roaming mobile virtual network operator (MVNO) that targets well-off Kenyans who travel a lot.

As a global MVNO, Sweet Roaming has partnered with about 450 mobile network operators in more than 200 countries around the world.

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“The moment you land in these countries, your SIM card connects to the cheapest network,” said Edwin Muthi, the CEO of Telco Partners. He added that his firm has partnered with some local operators.

One can buy the SIM card from travel agencies at Sh4,000, which Mr Muthi said includes $25 (Sh2,577) in airtime.

Once this initial amount is used up, subscribers can top up their airtime through www.sweet-roaming.com, or through M-Pesa, Airtel Money or a Visa card.

“Wherever you, anywhere in the world, you can top-up,” Muthi said.

Telco Partners was set up in Kenya in 2010, and it launched Sweet Roaming two years ago. However, the SIM card is not regulated by the Communications Authority of Kenya (CA), Muthi said.

Cost comparison

Data from CA shows roaming traffic, both inbound and outbound, has been a significant source of revenue for local telecommunications firms.

Roaming voice traffic registered 37.6 million minutes between July and September 2015, with East African Community (EAC) countries accounting for 22.6 million minutes of these.

It is the remaining 14.7 million minutes from non-EAC countries that Telco wants.

“If you are within East Africa or Central Africa, you are better off using your local SIM cards, but further afield, you are better off with Sweet Roaming,” Muthi said.

 

“Customers can save between 55 per cent and 95 per cent when calling from abroad.”

The firm’s call rates, as displayed on its website, show a subscriber in Qatar will pay Sh91 per minute for an outbound call to Kenya. For calls to Kenya from the United Kingdom, the firm charges Sh39 per minute.

On Safaricom, it would cost pre-paid subscribers Sh400 a minute to make a call from Qatar to Kenya, while Orange charges Sh349 per minute and Airtel Kenya Sh110.

In the UK, Safaricom charges Sh180 a minute for an outbound call to Kenya, Orange Sh119.73 and Airtel Kenya Sh110.

The total number of roaming-out messages was recorded at 7.7 million, with EAC countries accounting for 2.4 million of these texts. The roaming-in data traffic stood at 6.6 million MB.

Muthi said current roaming charges are not pegged to prevailing market conditions.

“You, the traveller, are not a permanent customer of the visited network so, in a way, they don’t have to bend over backwards to retain you. After all, you’re a ‘tenant,’ not a ‘family member,’ he said.

And because your home network chooses from few partners, probably two, the aspect of competition, which would have helped bring charges down, is largely lost, he added.

Telco relies mainly on travel agents to drive uptake of its SIM card. So when agents sell air tickets, they also make a pitch for the line.

“For most travellers, after air tickets and hotel bills, telephone bills make up the largest cost of staying abroad,” said Muthi.

This has seen Kenyans abroad resort to other means of communication, such as Skype and WhatsApp calls, to stay in touch with family or do business. But these can be unreliable, as Internet connections are not always stable.

Muthi said his company started out with an app similar to Skype, but this was discontinued as the Internet connection in Kenya then was unreliable.

So far, Telco has issued “a few thousand” Sweet Roaming cards, which Muthi attributes to low levels of awareness.

“We target Kenyans who can afford an air ticket, or those with a disposable income of over Sh100,000.”

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Telco Partners SIM card Roaming
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