Home ECONOMY Telcos Price Wars to Continue into 2020

Telcos Price Wars to Continue into 2020

by biasharadigest

Communication Authority (CA) says that there are 53.2 million active mobile subscriptions in Kenya as of September 2019.

On top of that, mobile penetration level stood at 112 percent with atleast 2G and 3G covering 96 per cent and 93 percent of the population respectively.

Trends in mobile subscriptions and penetration levels

In the 2019/2020 Q1 report, Safaricom still leads the pack with 65 percent market share, followed by Airtel 24.6 per cent, Telkom 6.7 per cent, Equitel 3.6 per cent, and other operators at 0.2 per cent.

Furthermore, the active mobile money subscriptions stood at 31.2 million transacting over Ksh1.7 trillion (July-September 2019). There were 235,168 mobile money agents.

Interestingly, the numbers reveal an emerging trend in mobile traffic and usage where there is increased usage among existing customers rather than from new users.

PRICE WARS

Net sim additions continued to decline for the third straight quarter to 1.08 million sim cards during the period under review from 1.1 million SIM cards posted during the previous quarter. The Authority projects this to be an indication of market saturation in terms of SIM card uptake.

Net SIM additions

Moreover, CA attributes growth in total local voice traffic to the various promotions and special on-voice offers launched by the service providers during the period under review.

Given that there is a stagnation in new sim users, telcos will introduce prices wars in data, voice, and messaging to retain customers. We expect price wars for data/voice/messaging – customers will enjoy lower prices and improved service quality

Diversification

Furthermore, telcos are expected to diversify their product offering to reduce overreliance on data and voice revenues. For instance Safaricom is looking for location intelligence platform – In the Expression of Interest document, Safaricom outlines that it is looking for suppliers of location tracking and intelligence platform to utilize information gathered from connected devices. Connected devices present benefits such as loss prevention by knowing the location of company assets, improving supply chain logisitcs, ensuring the safety of loved ones and increasing customer engagements.

Additionally, we have already seen the entry of M-post aiming to create digital postal addresses using customers mobile phone numbers.

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