Telcos employ 12pc more workers on back of fibre optic cables expansion

Telecommunications companies hired 12 per cent more workers last year, raising total staff count in the sector to 13,964.

The Economic Survey 2016 report released last week shows employment in the industry was largely driven by construction jobs related to expansion of fibre optic infrastructure, as mobile phone companies Safaricom, Airtel and Telkom Kenya reduced their overall staff count marginally.

Internet Service Providers (ISPs) generated the most jobs to reach a new high of 7,817 in the period compared to 6,237 in 2014.

Firms offering calling services, including fixed line, satellite and mobile operators on the other hand saw their total staff count fall to 6,147 from 6,201.

“There was a marginal decline in the level of employment by telecommunication operators,” reads part of the report.

“Over the same period, employment in the ISPs increased by 25.3 per cent to 7,817. This was partly due to the laying of fiber optic in the country.”

While the cash-rich telcos reduced their staff number, they continue to invest more compared to ISPs, though some firms are in both the voice and data markets.

Investments by the voice service operators hit a new high of Sh36.2 billion last year, rising 11.3 per cent from Sh32.5 billion in 2014.

Mobile service firms typically spend billions of shillings to upgrade their networks and expand their reach to new areas, with Safaricom alone spending over Sh20 billion annually.

READ: Kenya ranks second after South Africa in Internet access

ISPs on the other hand saw their combined investment drop marginally to Sh3.3 billion from Sh3.4 billion over the same period. The data firms such as Liquid Telecom Kenya have recently focused on laying fiber optic cables to homes and offices besides linking major towns.

While voice services enjoy the highest uptake, with majority of the population having a fixed or mobile line, it is data that is seen as presenting significant future growth opportunities.

Mobile subscriptions, for instance, grew 12.2 per cent to 37.7 million last year while Internet uptake jumped 45.7 per cent to 23.9 million in the same period.

Most data services are consumed by organisations and homes with fixed cable connections but 99 per cent of the customer base comprises individuals who use mobile phones and other hand-held devices.

The voice business is dominated by Safaricom, Airtel and Telkom Kenya after the exit of Essar Kenya (YU) Limited, with the fixed line service almost decimated with 85,000 customers.

Data services continue to register increased competition as the number of ISPs rose by a quarter to 221 in the period.

Voice however remains the larger business as telcos raked in Sh194.5 billion in revenue last year, rising 12 per cent from Sh173.6 billion in 2014.

Most of the revenue came from mobile voice calls which upended fixed line services in the early 2000s. Of the three mobile operators, only Safaricom is known to be profitable. The sector is capital-intensive, putting a strain on players who need to reinvest billions of shillings despite having a small market share.

Data or Internet revenue stood at Sh17.2 billion in the review period, a 9.5 per cent increase from the Sh15.7 billion the year before.

Demand for Internet services is expected to rival calling services in the future, with the emerging market set to be more fragmented and competitive as the number of players rise.