Digitization is not just a threat; it offers telecom companies an opportunity to rebuild their market positions, reimagine their business systems, and create innovative offerings for customers according to McKinsey and Company.
In Kenya, the latest data from the Communications Authority of Kenya (CAK) Telecommunications Sector statistics for the fourth quarter of the financial year 2016/17 ended in June 2017 estimates:
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 subscriptions.
The increase of mobile data subscriptions could be attributed to a sustained decline in the price of smartphones costs as well the widespread availability of the handsets. Internet penetration increased by 4.0 percent points to 64.8 percent from 60.8 percent recorded in Q4’2016.
Three, the number of internet broadband subscriptions increased by 42.6 percent to 15.4 mn from 10.8 mn recorded in Q4’2016. On a quarterly basis, the internet broadband subscriptions grew by 12.4 percent from 13.7 mn recorded previous quarter.
This is attributed to the affordability of smartphones in the country as well as affordable internet bundles offered by various internet service operators.
Kenya’s top three telco companies Safaricom Limited, Telkom Kenya and Airtel Kenya continue to invest heavily in their product offerings and infrastructure to improve their networks.
For instance, according to Safaricom’s annual report and financial statements 2017, they currently have the widest reach in the country with 4,677 sites providing 95 percent population coverage for 2G and 3,517 3G sites with a population coverage of 85 percent. Their fibre network connects key cities and towns spanning 4,700 kilometers.
On the other hand, Telkom Kenya believes that ‘To provide the best value for a simpler life, efficient business and stronger communities’,
“Expanding our network is essential to delivering the mobile and broadband needs of tomorrow. To this end, we have already invested KSh5 Billion in network and infrastructure expansion and densification,” says Aldo Mareuse, CEO of Telkom Kenya.
The telco has increased its number of sites by 50 percent to over 1600 sites across the country and continue to build in 2017.
Telkom Kenya is currently offering Freedom Bundles that have seen its subscribers benefit from free Telkom to Telkom calls, free WhatsApp and free text messages to any network.
Mareuse, said “The launch of Freedom Bundles is a testimony to that. More and more people are accessing the Internet on their mobile phones.”
In an op-ed, he further noted the mobile device becoming an essential part of everyday life. Most telcos are now ensuring they are customer-centric and give focus to more relevant products and services.
“This is the reason the industry continues making a sustained investment in cutting-edge technologies such as 4G networks that deliver faster download and upload speeds,” he notes.
“Data is more than just a luxury today; it helps deliver critical socio-economic benefits,” he adds.
Bob Collymore, Safaricom Chief Executive Officer is optimistic with the future outlook especially with the ongoing review of the policy Framework by the ICT ministry. “This initiative as we think convergence, investment, and innovation will provide a springboard for future growth of the economy.”
Subsequently, Airtel Kenya has not been left behind. It has also announced a range of data bundles further pushing the battle for mobile data dominance in the market.
The Economist further notes smartphones and the internet have made data abundant, ubiquitous and far more valuable.
Indeed, as data offerings become more affordable, ubiquitous broadband networks will be critical to social and economic prosperity as networks like transport, water, and power according to the International Telecommunication Union (ITU).
Read: Mobile to remain the biggest technology next two years – CEO Chat
In conclusion, “The future looks even brighter with all these efforts driven by the private sector and government. Kenya is sitting on a huge data opportunity that does indeed need to be fully harnessed,” notes Mareuse.
What is at stake is how the telcos will tap into the wide array of data they collect from their subscribers to deliver relevent products and services to them.