Why The Next Telecommunication Giant Must Invest in Data

Kenya’s Telecommunications market has been expanding widely and over the past few years, the landing of four fiber-optic submarine cables have just revolutionized the sector.

There has been a dramatic increase in international bandwidth ending Kenya’s dependence on limited and expensive satellite bandwidth and, in the process, bringing 90 percent drop in the cost of broadband access making internet services available and affordable to a larger population.

Kenya has three major telecommunications companies that offer almost similar products and services. The companies are Safaricom Limited, Telkom Kenya, and Airtel Kenya. Despite the fact that the three companies provide almost similar products and services, Safaricom has always been ahead, thanks to its MPESA services.

However, with the ever-growing number of internet consumers in Kenya, the next telecommunication giant in Kenya will be that who will heavily invest in data and satisfy the growing demand. Of the three companies, Telkom Kenya stands a chance of soaring above the others and take a lead in data dissemination in Kenya because of the following two major reasons:

• Infrastructure – In terms of infrastructure, many people think that Safaricom has better infrastructure than Telkom but this is not the case. Telkom Kenya has better infrastructure in terms of machinery and only needs to work on its network coverage as well as increasing awareness of its services to its consumers.
• The data offers that Telkom Kenya has been more attractive than other market players. For instance, in the last three months, the telco offered its customers with a free WhatsApp and free 4G internet with most reviews indicating that those who subscribed to it enjoyed and benefitted. However, complaints about low internet in some areas came up on several occasions.

Safaricom Limited has a chance also to be the next giant not only in Kenya but in Africa. The telecom has a wide range of network coverage in Kenya and has a wide fan base. However, many people often complain that Safaricom’s data is very expensive and unaffordable for most people. Telkom Kenya can capitalize on this complain, not only by reducing their prices (which they already did) but strengthening their services) e.g network coverage.

Africa’s Internet Penetration

According to the Internet World Stats, Africa accounts for 10 percent of internet users in the world with the rest of the world bagging 90 percent. The internet penetration in Africa as at June 2017 stood at 31.2 percent with 388,376,491 estimated internet users.

If this report is something to go by, the figures indicate that Kenya has a total of 43,329,434 internet users with a penetration of 89.4 percent. The country is also said to have a total of 6,200,000 Facebook users.

In 2016, Communication Authority of Kenya, in a report, revealed that 99 percent of Internet users in Kenya access internet via mobile phones with internet penetration having hit 85.3 percent with the surge attributed to the availability of affordable smartphones.

In another report released by Jumia Business Intelligence and GSMA Mobile entitled White Paper 2017, Kenya led other African countries in internet penetration with over 30 million people. The report also showed that 67 percent of Kenya’s population are internet users.

David Indeje, in an article, Subscribers Data to Determine Who Dominates the Telco Sector in Kenya, says that digitization is not just a threat; it offers telecom companies an opportunities to rebuild their market positions, reimagine their business systems and create innovative offerings for customers according to McKinsey and Company.

“One, mobile subscriptions increased by 0.6 mn new subscriptions, representing a 1.4 percent y/y growth to 40.3 mn subscriptions, from 39.7 mn registered in Q4’2016. Two, internet subscriptions recorded a 10.5 percent growth to 29.6 mn subscribers from 26.8 mn registered in Q4’2016 driven by a 15.3 percent increase in mobile data subscriptions to 29.4 mn at the end of the quarter, which accounted for approximately 99.0 percent of the total subscription,” David notes in his article.