Telkom Kenya added half a million new customers to its list of data subscribers in the first quarter of the year, clawing back a large chunk of marketshare it had lost to its rivals.
The company, which trades as Orange, grew its subscriber base by 499,610, expanding its marketshare to 9.5 per cent from 1.8 per cent in the preceding quarter, according to the latest industry report.
The report by the Communications Commission of Kenya (CCK) — the telecoms sector regulator — also shows that Telkom Kenya was the only operator that increased its market share as growth remained flat for its rivals.
“We have segmented our data offering into two: Mass and corporate markets. This has enabled us to give the required focus to our clients,” said Mikhael Ghossein, the Telkom Kenya chief executive.
“During the period, we also sold our modems at Sh1, 999 which was the lowest rate in the market (and) got lots of referrals from those who were using our service,” he said. “All these helped us grow the numbers and we are soon reclaiming our position in the data market.”
Safaricom, which is the dominant player in the data market with 4.5 million subscribers, lost 135,315 — shedding off six percentage points from its marketshare to 71 per cent.
Essar Telecoms — which trades under the yu brand — lost 28,501 internet subscribers that cut its marketshare to 10 per cent from 11 per cent in the previous quarter.
Indian operator Airtel now has the smallest share of the fast-expanding market segment, having lost 2,009 subscribers leaving it with a 9.45 per cent stake from the previous 10 per cent.
Growth in data subscribers is expected to soften the government’s stand on the proposed financing of Telkom Kenya’s turnaround plan.
The Treasury, which has a 49 per cent stake in Telkom Kenya, had, among other things demanded that the operator it co-owns with Orange Telecoms of France prepare a detailed business plan with realistic targets for each segment of the market before drawing the Sh2.5 billion it has been allocated in the national Budget in June.
“During the quarter, the total broadband subscriptions increased to a record 651,738 up from 131,829 subscriptions posted the previous quarter,” CCK said in a report it released late Tuesday. “This tremendous growth was brought about by increased subscriptions of GSM 3G and EVDO by one of the operators, Telkom Kenya Limited.
Industry analyst Vincent Mutavi attributed the increase in the number of data subscribers to improvement in the quality of Telkom’s customer services.
“There is a change of mindset among the employees especially, the customer care, besides the deployment of a portal where subscribers can load and monitor how much they have spent on data, a service no other operator is offering,” said Mr Mutavi.
Telkom Kenya launched its 3G services last September, making it the second operator after Safaricom to acquire the platform. Airtel launched the technology in February to become the third 3G service provider.
Telkom Kenya, which was Kenya’s only provider of data and voice services before the liberalisation of the telecoms industry in 1999, quickly lost marketshare to the new entrants and has since been struggling to reclaim its leadership position with little success.
The firm is Kenya’s sole provider of fixed telephone line services with heavy investments in three undersea fibre optic cables, TEAMs, Eassy and LION.
It also owns the largest terrestrial fibre optic network that runs from the port of Mombasa to Malaba on the Kenya/Uganda border besides managing the government-owned National Optic Fiber Backhaul Infrastructure (NOFBI).
NOFBI is the backbone of Kenya’s internet network which links the 47 counties and is used by other operators such as Safaricom, Jamii Telecom and AccessKenya to transmit voice and data traffic. Impatience has more recently been growing at the Treasury that this elaborate infrastructure has not translated to market share advantage for Telkom both in the mobile and fixed internet segments.
Retail or mobile internet is sold to consumers through modems, handsets and tablets such iPads -- and remains dominated by market leader Safaricom.
In the fixed or wholesale segment of the market, Telkom Kenya also increased its marketshare to 13.7 per cent from 10 per cent the previous quarter.
Things were, however, not so rosy for Kenya Data Network (KDN), which controls this market segment, as its marketshare shrank to 30 per cent from 33.48. Wananchi Group slightly grew its marketshare to 23.5 per cent from 23 per cent while AccessKenya’s share went up to 14.5 from the 14.46 per cent the previous quarter.
The four operators have increased their investment in data to cut over-reliance on voice revenue which has been on the decline since August 2010 sparked by a price war among the operators.
The latest CCK report indicates that despite the fall in call tariffs, the average number of minutes that consumers spend on calls continued to decline.
Minutes of Use (MoU) dropped to 77.7 per month in the quarter under review from 79.9 minutes per subscriber per month in the previous quarter.
This means subscribers spent 2.8 per cent less time on call during the period, a development that has been attributed to the large increase in the number of mobile subscriptions (4.0 per cent) compared to a smaller growth in the total mobile traffic (1.6 per cent).