The Communications Authority issued the first MVNO licences in 2014, opening up the market for telecom operators that did not want to spend money rolling out their own infrastructure.
While the terms of the MVNO agreements have never been made public, the sharp rise in revenues is reflective of the growth of Finserve’s Equitel to become one of the more formidable players in Kenya’s telecommunications sector.
The other two MVNOs that initially signed deals with Airtel have barely made a mark on the telecommunications industry, registering less than one per cent market share by customer as at March 2017.
Airtel Kenya earned Sh309.8 million revenue from leasing out its network to mobile virtual network operators (MVNO), representing a five-fold growth between 2014 and last year.
Financial statements recently released by the company show that Airtel earned Sh309.8 million last year from the MVNOs on its network compared to the Sh60 million it earned in 2014.
The Communications Authority of Kenya (CA) issued the first MVNO licences in 2014, opening up the market for telecom operators that did not want to spend money rolling out their own infrastructure.
Airtel hosts at least three such operators on its network, including the largest MVNO, Equity’s Finserve. In 2014, it was announced that the firm would also host Sema Mobile and Mobile Pay on its network.
While the terms of the MVNO agreements have never been made public, the sharp rise in revenues is reflective of the growth of Finserve’s Equitel to become one of the more formidable players in Kenya’s telecommunications sector.
Data from the CA shows that Equitel had 1.7 million mobile subscribers as at March 2017. While the firm has only 4.4 per cent market share by customer base, it has since 2014 grown to become Kenya’s second biggest mover of mobile money after market leader Safaricom.
The other two MVNOs that initially signed deals with Airtel have barely made a mark on the telecommunications industry, registering less than one per cent market share by customer as at March 2017.
The CA has over the last two years licensed two more MVNOs, Lycamobile and Homeland Group, but there has been no clear indication that the two firms will be hosted on Airtel’s network.
Airtel’s financials indicate that the company is in deep trouble, reporting after tax losses of Sh8.1 billion in the year to December 2016 and weighed down with debt of about Sh45 billion.
MVNO revenues accounted for about 1.8 per cent of Airtel’s Sh16.9 billion revenues in 2016. The company still continues to rely on traditional sources of revenue with the voice segment contributing the largest chunk at Sh7.8 billion.
In keeping with industry trends, voice revenues are on a depressive trend, having fallen from Sh9.5 billion in 2015. Data revenues, on the other hand, rose from Sh3.8 billion in 2015 to Sh4.5 billion in 2016.
