Safaricom Market Share Increases Despite Drop in Users

Kenya’s biggest telecommunication company Safaricom Limited (NSE:SCOM) maintained its market position by 3.8 percent to 69 percent in the three months ended last September from the previous quarter’s share of 65.2 percent. However, the total number of active mobile phone users dropped by 1.2 million.

Mobile subscriptions declined by 3.0 percent to 38.5 million, from 39.7 million registered in the previous quarter, with mobile penetration decreasing by 2.7 percentage points to 87.3 percent from 90.0 percent registered in the previous quarter.

The decline was attributed to Telkom revising its subscribers to exclude non-active subscribers as per the regulatory requirements according to statistics released by the Communications Authority of Kenya (CAK) for Q3’2016.

The report showed that the minutes of use per subscriber per month in the industry increased by 4.0 percent to 89.4 minutes, from 86.0 minutes registered the previous quarter while the total number of Short Messaging Service (SMS) sent during the quarter increased significantly by 5.2 percent to 12.2 billion messages from 11.6 billion registered in the last quarter.

Key highlights on the CA report include:

1. The number of internet broadband subscriptions increased during the quarter under review to 11.9 million from 10.8 million recorded in the previous quarter, attributed to increased digitization of services and high uptake of internet enabled mobile phones that are affordable and readily available in the market. The broadband penetration closed at 27.0 percent, up from 24.5 percent the previous quarter.
2. Internet subscriptions stood at 25.6 million subscribers during the quarter under review, down from 26.8 million registered in the previous quarter, which was a decline of 4.5 percent as a result of removal of non-active subscribers. Despite this, the number of internet users remained steady at 37.7 million, with one subscription able to serve a number of users.
3. Important to note is that ‘internet broadband subscriptions’ include those subscriptions to homes and offices, while ‘internet subscriptions’ refer to those offered by mobile operators.

Safaricom gained market share across all categories except mobile money and minutes of use. Other service providers’ highlights from the report were:

• Safaricom’s subscriber market share increased by 3.7 percentage points to 68.9 percent from 65.2 percent while its minutes’ market share decreased by 1.5 percentage points to 76.3 percent. Safaricom’s SMS market share increased from 93.9 percent to 94.4 percent on account of its new SMS bundle offers.
• Airtel’s total mobile subscriptions increased by 3.1 percent to stand at 6.7 million during the period under review from 6.5 million in the previous quarter while the pre-paid subscriptions increased by 2.7 percent and post-paid subscriptions increased by 2.2 percent. Airtel market share by subscriptions increased by 0.9 percent to 17.5 percent in Q3’2016 from 16.6 percent registered in the previous quarter.
• Equitel’s mobile subscriptions increased by 13.3 percent to stand at 2.3 million during the period under review from 2.0 million the previous quarter. Equitel’s total subscriber market share increased by 0.8 percentage points to stand at 5.9 percent.
• Orange Kenya had a subscription growth of 44.0 percent at 2.9 million down from 5.2 million recorded in the previous quarter, while the total number of pre-paid subscriptions dropped by 44.1 percent, with the post-paid subscriptions dropping by 8.0 percent. Orange Kenya’s market share by subscriptions decreased by 5.6 percentage points to 7.6 percent in the quarter under review from 13.2 percent recorded in the previous quarter.

The mobile money statistics, however, indicated that Safaricom’s market share of the value of transactions declined to 78.7 percent from 84.3 percent and transaction numbers declined to 81.6 percent from 81.9 percent in Q3’2016 from Q2’2016, respectively.

The loss in market share was attributed to Equitel, though Equitel has an additional banking channel and hence banking transactions have been included in its market share data whereas Safaricom exclusively focuses on money transfer and payments.

Similar to the last quarter, the industry has recorded improved growth in terms of mobile subscriptions and data consumption.

Related: SMEs in Machakos County to Enjoy High Speed Internet from Safaricom