Race to supply Internet mobile phones intensifies

Cell phone makers are scrambling for deals to supply data-enabled handsets as telecommunication firms intensify their presence in the mobile data market.

The race to get a share of the Kenyan data market is expected to get stiffer as operators Telkom Kenya’s Orange and Zain Kenya upgrade to faster 3G mobile Internet technology by the end of the year with Safaricom planning to upgrade its current 3G network to 4G in the next two months.

The scramble has seen mobile phone manufacturers who can offer higher discounts on easy-to-use data-enabled phones clinch lucrative supply deals with government agencies, companies and non-governmental organisations on behalf of the telephony companies.

Despite the drop in margins per handset and increased spend on brand marketing, revenues are set to grow as companies buy in bulk the cheaper handsets and those that consumers can easily use.

Cell phone makers say they intend to leverage on the high volumes firms are buying to cushion their bottom lines.

The biggest winners in the supply tender race are the leading handsets makers, Nokia, Samsung, LG, Motorola and Sony Ericsson.

They are targeting companies and government agencies who buy the handsets in bulk as they benefit from heavy discounts and also enjoy the bundling of the handsets with data from any of the operators.

Recently during the referendum, Nokia clinched a competitive deal to supply Interim Independent Electoral Commission (IIEC) with 20,000 handsets that were used by the agents to relay the results from the grassroots.

Ms Dorothy Ooko, the communication manager for Nokia in East and Southern Africa, says entering into a deal with telecommunication operators to supply their clients or market with data-enabled handsets phones is becoming more competitive than before.

“The IIEC deal was the most recent competitive offer in the market and what the clients were looking for is affordable and also easy to use data-enabled handsets,” said Ms Ooko. “With the government embracing things like e-health the competition is going to get stiffer as they will require handsets to register things like births.”

Increased use of social networking sites has also fuelled take-up of data-enabled handsets.

Improved telecommunication infrastructure in Kenya with the connection of three undersea cables, TEAMs, Seacom and Eassy alongside a number of terrestrial fibre optics by both the government and the private sector has also led to increased use of mobile phones to access faster internet despite one’s location.

Internet usage has grown according to the industry regulator, Communication Commission of Kenya (CCK).

CCK says the increase in the number of internet subscribers has been accelerated by the provision of data services through GPRS/Edge and 3G networks of mobile operators.

“Mobile service contributed 99 per cent of the total Internet subscriptions during the period under review,” says a CCK report.