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More Kenyans taking up post paid mobile telephone services

NEWS
By Macharia Kamau | Apr 21st 2014 | 3 min read
By Macharia Kamau | April 21st 2014
NEWS

By Macharia Kamau

Nairobi, Kenya: More Kenyans are taking up post-paid mobile telephony services that have in the past been perceived as a preserve of the rich.

Data from the Communications Commission of Kenya (CCK) shows that the subscribers are opting into post-paid services and abandoning prepaid connections.

The post-paid segment grew by 22.9 per cent in the last quarter to December 2013, substantial growth given the slow rate at which mobile operators have grown their subscriber base in the recent past — with the voice market seen as nearing saturation.

Prepaid subscribers

 Growth in the number of post-paid customers is in comparison to the decline in the number of prepaid subscribers. The number of post-paid customers is however still marginal, with prepaid subscribers accounting for over 98 per cent of the mobile users. Post-paid customers are however high spenders with higher average revenue per user compared to prepaid subscribers. “Prepaid subscriptions declined by 1.2 per cent to stand at 30.7 million down from 30.8 million posted during the previous quarter.

On the contrary, post-paid subscriptions have continually demonstrated an upward trend hence recording growth of 22.9 per cent,” said CCK in a quarterly report on the telecommunications industry.

“During the quarter (to December 2013), there were 560,503 post-paid subscriptions up from 455,983 posted in the last quarter. “Safaricom grew the number of its post-paid customers by about 100,000 in the three months to 431, 000. The report shows that post-paid customers were up even for operators that saw a general decline in the total number of subscribers on their networks.

Airtel for instance lost 348, 000 subscribers but its post-paid customers went up to 124, 000 as of December 2013, from 118 900 customers the previous quarter. Essar Telecom’s yuMobile’s total subscriber base declined by 118, 000 subscribers but its post-paid subscribers went up 1,572 as of December from 1,323 in the quarter to September. Post-paid is however still a small market in Kenya and account for a marginal two per cent of the total subscriptions.

Pre-paid subscriptions continued to account for the largest share of the total subscriptions — at 98.2 per cent during the quarter. In developed markets, post-paid subscriptions are more preferred by consumers and account for the majority of subscriptions. According to a GSMA 2013 report, mobile subscriptions in developed economies tend to be on post-paid as opposed to pre-paid, with 75 per cent of connections in North America and Western Europe being post-paid.

Required contracts

Post-paid services are however less popular in developing nations, at about 40 per cent in Asia and 20 per cent in Latin America. Africa has the least number of post-paid connections at just four per cent of the subscribers. “This is partly a historic factor in the development of markets where early adopting countries required contracts (post-paid) but later adopting markets used pre-paid as a quicker way to launch and get customers connected,” said the GSMA report. “As markets mature, consumer expectations are harder to shift. In some countries, the pre-paid model is more accessible to people who do not possess the prerequisite bank account and identity documentation required to enter into a contract.”

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