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Mixed fortunes for mobile phone firms as subscriber tastes change

By Macharia kamau | April 18th 2014
By Macharia kamau | April 18th 2014

By Macharia kamau

Kenya: Mobile operators Airtel and yuMobile jointly lost close to half a million customers in the three months to December 2013.

Latest data from the Communications Commission of Kenya (CCK) shows the two telcos lost a combined 467, 000 subscribers while rival firms Safaricom and Telkom Kenya increased their subscriber bases each by 2.1 per cent.

Airtel lost 348,000 subscribers or 6.3 per cent of its subscribers during the quarter to December while Essar Telecom’s yuMobile saw its subscriber bases decline by 118,000 subscribers or 4.3 per cent.

The statistics released by CCK Wednesday are on the background of the planned sale of yuMobile.

The report also showed change in subscriber patterns, with already existing customers ditching pre-paid services and taking up post-paid services. According to CCK pre-paid subscriber declined 1.2 per cent while the number of post-paid customers went up 22 per cent.

Safaricom and Telkom Kenya — Orange –— grew both the number of their subscribers and market share. Safaricom also saw the number of its high value post-paid customers grow by about 100, 000 in the three months to 431, 000.

The firm that in recent years had seen a sustained decline in its market share is also seen to be reclaiming lost ground.

Safaricom had upwards of 80 per cent market share a few years ago but lost to about 63 per cent especially following a vicious price war in 2010. It has over the last year grown market share to 67.9 per cent as of last December, compared to 63.2 a year earlier.

Mixed growth

The four mobile operators demonstrated mixed growth in the number of subscriptions with two operators recording growth, while two operators registered a decline during the quarter in review.

“Safaricom Limited and Telkom Kenya Limited both grew by 2.1 per cent during the quarter. Airtel Networks Limited and Essar Telecom Limited recorded a decrease in their subscriptions of 6.3 per cent and 4.3 per cent respectively,” said CCK in a quarterly report on the telecommunications industry.

In line with the growth in subscriptions, market shares for each of the operators changed during the period under review. Safaricom Limited recorded the largest share of 67.9 per cent gaining 1.2 percentage points from the previous quarter.

Airtel Networks Limited followed with 16.5 per cent market share down from 17.6 per cent recorded in the previous quarter, representing a decline of 1.1 per cent. Essar Telecom also lost 0.4 per cent during the period to register 8.5 per cent market share up from 8.9 during the previous quarter.

Market shares

Telkom Kenya (Orange) gained 0.4 per cent during the period to record 7.2 per cent market shares from 6.8 per cent recorded in the last period. Total number of subscribers grew marginally, mostly due to the growth in the number of post-paid subscribers that went up 22 per cent, according to the report.

Pre-pay subscribers, however, declined 1.2 per cent, with a number of them opting for post-paid services. CCK expects subscriber numbers to grow marginally as the markets reach a “plateau phase.” The industry regulator expects Internet to be a major growth area for the industry.

During the quarter, mobile subscriptions grew marginally, a typical growth trend observed over the previous periods.

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