Safaricom

Kenya’s largest telecoms operator Safaricom launched its 5G high-speed internet service on Thursday, becoming the first firm to deploy the technology commercially in East Africa.

The company, whose internet provision business is one of its fastest-growing, uses equipment from Nokia (NOKIA.HE) and Huawei to power its 5G network.

Safaricom, which is part-owned by South Africa’s Vodacom and Britain’s Vodafone, is initially offering Wi-Fi subscriptions first as it attempts to win a greater share of the fixed data market.

“We… view 5G as being critical in delivering new solutions that will address economic development, healthcare, manufacturing, infrastructure and even delivery of government services,” said Safaricom CEO Peter Ndegwa at a launch ceremony for the network.

While Safaricom dominates the mobile data market – commanding about a 65% share – it holds only about a third of the fixed data market, data from the Communications Authority of Kenya showed.

Besides the Wi-Fi market opportunity, the initial focus on 5G Wi-Fi rather than mobile is because there are still relatively few 5G-compatible devices in Kenya, the company said.

Out of nearly 27 million smartphones in use in Kenya, Ndegwa said only about 200,000 are 5G-compatible because of the high costs of such devices.

But prices are coming down quickly and companies such as Safaricom are expanding their financing models which should expand access, he said at the launch.

Customers with compatible phones would however be able to use the network soon, the company said, when it starts selling 5G data packages.

The firm has 35 active 5G sites in Nairobi and other major cities and it plans to increase that number to 200 by March next year. It started testing the network last year.

The United States government has urged countries not to include Huawei in their 5G plans, citing security concerns which Huawei has denied.

(Reporting by Ayenat Mersie; editing by Hereward Holland and Jason Neely)

Safaricom has cut rates for its monthly packages of bundled minutes, mobile data and SMS by nearly five per cent as the telco seeks to deepen dominance amid stiff competition from its rival Airtel.

The telco yesterday slashed the cost of the 1,000 minutes that also come with 15 Gigabytes (GB) of mobile data and 2,000 SMS by 4.7 per cent to Sh2,000 — being the highest cut for five of its packages that last for a month.

Airtel, meanwhile, offers customers 700 minutes, mobile data of 7 GB and 2000 SMS every month for Sh1,050.

Telkom Kenya, on the other hand, gives subscribers 12 GB of mobile data and free WhatsApp per month for Sh1,000.

Safaricom’s tariff reviews come at a time Airtel ate into its dominance of the voice market and grew its share to a record high while cutting that of the market leader to a two-year low.

Safaricom’s new rates for the bundled minutes, mobile data and SMS offer the telco a major boost in its pricing war with Airtel as the duo seeks to grow their customer numbers and revenues.

“By consolidating our monthly plans, we seek to simplify our product offering while enabling our customers to enjoy a digital lifestyle in an affordable manner,” said Safaricom Chief Executive Officer Peter Ndegwa.

Industry data from the Communications Authority (CA) shows that customers spent sh12.14 billion minutes on Safaricom’s network in the three months that ended September, a 4.36 per cent decline from 12.69 billion minutes in the three months that ended June.

Airtel callers spent 6.36 billion minutes, a 3.8 per cent rise from 6.13 billion minutes in the three months that ended June while callers on Telkom Kenya talked for 370.57 million minutes from 341.4 million in June.

Safaricom had in July last year increased the cost of the bundled packages following a rise of excise tax on airtime and calls from 15 per cent to 20 per cent.

The cost of the monthly packages that offer customers 400 minutes with 5GB and 1,000 also dropped by 4.7 per cent to Sh1,000.

The price of the package where customers get 1,500 minutes, 25 GB and 3,000 SMS also fell 4.7 per cent to Sh3,000.

Safaricom’s bundled packages also offer customers free WhatsApp and YouTube for a month as the telco steps up efforts to woo more subscribers.

Safaricom is betting on the reduced rates to regain its share of the voice market as the telco seeks to pull further away from Airtel.

The telcos have been caught up in pricing wars for years, a battle that has seen customers benefit in the form of reduced charges for bundled packages and getting free minutes once they hit a target of specified credit per day.

Safaricom has crossed the one million mark in subscriber numbers in Ethiopia just a month after the launch of operations in the populous nation indicating the telco’s warm reception.

The revelation was made via a live broadcast screen count that was shared across social media platforms on Wednesday.

Just last week while announcing its half-year financial results, the company said it had acquired 740,000 subscribers by the end of October, generating Sh98.3 million in revenue from the market in the first month of operations.

This means that the telco has gained a subscriber base of 260,000 users in two weeks translating to an average of 18,000 sign-ups daily.

The Kenyan firm is battling with Ethiopia’s State monopoly Ethio Telecom to control the country’s expansive market of 110 million mobile users.

Safaricom is one among several Kenyan firms that have been salivating for the Ethiopian market given its huge population, which comes second in Africa after Nigeria’s.

Ethio Telecom boasts a customer base of 58.7 million, making it the biggest single-country subscriber base of any operator on the continent.

Safaricom last year led a consortium that included Vodafone, Vodacom, the United Kingdom’s CDC Group and Japan’s Sumitomo Corp which secured the first private mobile telephony license with an Sh97.9 billion bid.

The consortium spent over ­$850 million (Sh102.6 billion) on acquiring the Ethiopian license and has further pumped $300 million (Sh36.2 billion) as capital expenditure this year.

The firm has hired at least 650 staff for Ethiopian operations, comprising 200 expatriates and 450 local workers including 50 fresh graduates.

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Safaricom has increased its market share in Kenya’s mobile services as subscriptions hit 50.2 million in September.

This is an increase from 41.9 million in a similar period last year, stamping its position as the market leader.

Latest Communication Authority (CA) data shows Telkom Kenya has also gained subscriptions growing to 4.1 million in the first quarter of the current financial year (July-September).

Airtel Kenya has stagnated at 17.1 million subscribers even as SIM card subscriptions in the market increased to 65.5 million from 64.7 million in the previous quarter, a period the country had a fresh ownership registration drive.

The number of mobile money subscriptions also increased to 37.4 million up from 37.2 million in June.

“The quarter under review was marked by increased activity across mobile network platforms due to the busy electioneering period,” CA said in its quarterly report released on Wednesday.

The growth of 1.2 per cent translated to a mobile (SIM) penetration level of 132.5 per cent.

Safaricom now controls 66 per cent of the country’s mobile (SIM) subscriptions, Airtel (26.3%), Telkom(4.9%) while Finserve (Equitel) has a 2.3 per cent share.

Jamii Telecommunications remains at the bottom of the market with a 0.5 per cent share.

M-Pesa dominates the mobile money market with a 96.8 per cent share with Airtel Money and T-Cash by Telkom having a meagre share of 3.1 per cent and 0.1 per cent, respectively.

Meanwhile, feature phones continue to dominate Kenya’s mobile telephone usage, CA data shows, despite the rising number of cheaper smartphones being availed by companies.

As of September 30, this year, there were 60.7 million mobile phone devices connected to mobile networks.

Of these, 32.9 million were feature phones while 27.9 million were smartphones.

The penetration rates for feature phones and smartphones as a percentage of the total population were 66.5 and 56.4 percent respectively.

In a similar quarter last year, the total number of feature phones that had been connected to the network was 33 million, with smartphones accounting for 26 million gadgets.

While there has been a growth in smartphones and a slight reduction in feature phones when compared to same quarter last year, the market has in recent times been flooded with earlier generations of mobile telephones, with their demand still high.

“What we are seeing is that most people still want to have the ‘mulika mwizi’ (old generation phones) for business and calls while smartphones are for internet-based activities,” Meshack Mwaura, a Nairobi-based phones dealer told the Star.

As mobile money continues to gain popularity among businesses and public institutions, the number of subscriptions continued to increase with the reference period recording 37.4 million, from 37.2 million reported during the preceding period.

This represented a penetration level of 75.7 percent.

There has also been an increase in the use of short messages services and domestic SMS traffic grew by 1.8 percent to record 14.23 billion from 14.0 billion messages reported in the preceding quarter.

This comes even as platforms such as WhatsApp and Telegram continue to be popular.

The average minutes of use per call for on-net and off-net local mobile voice traffic stood at 1.6 and 1.0 minutes respectively, with Airtel customers spending more time on a single on-net call averaging 2.7 minutes.

Telkom Kenya and Equitel customers recorded the highest average minutes of use per off-net call, attributed to their lower calling rates.

The country continues to lead within the region in terms of general ICT infrastructure, mobile financial services, broadband connectivity, value-added services and FinTech services, CA notes.

Earlier in the year, the government launched its ten-year Digital Masterplan 2022-2032, in a bid to enhance the country’s digital economy and ICTs primed as a key driver for the developmental agenda across other sectors.

“The roll-out of commercial 5G network which enables consumers to access super-fast data services together with improved fibre network connectivity, and rapid developments in the mobile market is expected to spur growth in various areas of the economy,” CA said.

In addition, it will promote and drive the government agenda on leveraging technology to access public and private sector innovation.

Senior officials of the country’s leading mobile telephone operator Safaricom could be in trouble after an Embu man sought a court order to punish them for refusing to release Sh7.7 million he is claiming from troubled insurance firm Invesco Assurance.

Ephantus Mbogo Njuki wants directors of Safaricom including the chief executive officer Peter Ndegwa, Dilip Pal, Winfred Ouko, and Linda Muriuki among others jailed for six months for refusing to surrender the money as directed by the court.

Safaricom operated an Invesco account through a Paybill number and Mr Mbogo attached the account to recover a compensation claim of Sh7.7 million.

The businessman says he obtained a garnishee order (a legal notice to a third party to surrender money) to settle his claim against Invesco Assurance.

Embu senior resident magistrate H. Nyakweba said in the ruling that he does not see why the corporate veil (holding shareholders or directors personally liable) should not be lifted and hold the directors in contempt of court.

“In the upshot, I allow the application dated 03.11.2022 as prayed. As a result, I issue a warrant of arrest against all the directors of Safaricom PLC,” the magistrate said on December 8, 2022, adding that the directors should be presented before him as soon as possible but not later than January 10, 2023.

Mr Mbogo told the court that he served the order upon Safaricom on October 4, directing the telcos to release the money but the company has refused to comply.

The magistrate noted that although Safaricom representatives were not in court when the garnishee order was issued on September 29, the company was served with the order through an email.

He said going by the precedent set by the Court of Appeal, Safaricom was duly served.

“Despite having been served with the said order, the application subject to this ruling as well as the order of 09.11.2022, the garnishee (Safaricom) did not find it fit to participate in this proceedings and explain itself. I find this to be a blatant violation of court orders,” he said.

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