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Stiff competition drives product price cut by Wananchi group

SCI & TECH
By By Fredrick Obura | August 13th 2012

By Fredrick Obura

The Wananchi Group has announced 25 per cent reduction in its Television, Internet, and Voice services in a latest move to shield its market share and offer better experience to subscribers.

The market is witnessing stiff competition with the company, once a dominant provider of Internet services.

It is facing competition from mobile phone companies who have taken on data business to improve their revenue.

Focus on data by Safaricom, Orange, Airtel, and yuMobile follows fierce competition in the segment that has seen drastic reduction in calling rates by more than half.

Firms such as Orange have intensified data market penetration efforts with the launch of 3G WI-Fi modem.

 Data products

The high-speed data product dubbed Domino is a plug and play device ideal for data users on the move. Running on Orange’s robust 3G network, the modem will be able to support up to five users, within a transmitting radius of 20 metres.

The modem’s tethered feature is ideal for a user with multiple data enabled devices.  

According to the Orange company Chief Executive Officer Mickael Ghossein, the new modem will improve the value proposition of Orange to its Small and Medium Enterprises market.

“This is a sector that contributes close to 20 per cent of the country’s GDP. Orange is therefore obliged to play its role to support this important sector with the provision of varied data connectivity options, dependent on the nature of their business and processes,” he said. In the pay television segment where Wananchi Group through its Zuku Triple Play arm is a major player, MultiChoice and a new entrant, StarTimes, promises competition with enhanced packages.

StarTimes is challenging the dominance of South Africa’s MultiChoice Ltd, owners of the DStv bouquet.

More investments

StarTimes is investing some Sh6.3 billion ($75 million) to roll out its digital TV countrywide. In the new Zuku deal, Premium TV channel subscribers who have access to 87 channels, Internet speeds of 8Mpbs and telephony services get a discount of Sh1,000 from Sh4,999 to Sh3,999.

“Following a marketing survey, we realised most of our customers wanted faster internet connections at an affordable price. We therefore decided to discount our packages,” said Zuku Triple Play Managing Director Kamande Muiruri.

Affordable prices

“The rationale behind the new packages is to provide more value even more affordably,” he added.

He said, Premium subscribers who have access to 87 TV channels, Internet speeds of 8Mpbs and telephony services has been discounted by Sh1,000.  The Company said it has introduced a new premium package for heavy Internet users with broadband speeds of 20 Mbps, 87 TV channels and voice, all going for Sh 9,999.

 “The higher the Internet speed subscribed to, the better the experience for each user sharing a single Internet connection,” said Muiruri.

At the same time, Zuku announced expansions plans into Eastern and Northern parts of Nairobi. “Starting this August we are planning to rollout our cable connection in Eastern part of Nairobi. This will cover, Imara Daima, Dohnholm, Embakasi and Buruburu. We will also extend our network to Runda,” said Kamande.

 The next rollout will target Kiambu and Limuru, which is earmarked for next year.

The number of homes covered has risen to 100,000 homes, covering Karen, Langata, Otiende, Nairobi Dam, Madaraka, South B and South C, Kilimani, Lavington, Westlands, Parklands and Ngara.

Zuku’s aggressive expansion is backed by a $100 million (Sh8 billion) investment kitty, it has secured from private equity funds and loan financing that will enable it rollout its Triple Play services across Nairobi.

Glance

Penetration

 • Zuku Satellite TV brand is also available in Uganda and Tanzania

• Pay TV penetration it is targeting is presently at less than one per cent.

Zuku’s aim is to provide affordable quality content which is suitable for the entire family

• In the pay TV segment, the company has to battle it out with the dominant Multichoice and SmartTV, a new entrant into the market


 

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