Latest statistics from the Communications Authority of Kenya (CA) show the number of active mobile subscriptions rose to 46.6 million as at September 2018. Subsequently, mobile penetration crossed the 100.1 percent mark for the first time. Simply put, mobile penetration is the total number of active SIM Cards calculated as a percentage of total population.
Broadly, the fact that there is as many mobile connections as people in the country is a huge achievement for the industry. But does 100 percent penetration mean that everybody in the country now has an active SIM card? Well, that’s exactly not true and can be a bit misleading. Traditionally, mobile network operators (MNOs) globally have used the number of subscribers to size market growth.
However, according to a GSMA Intelligence May 2014 note on measuring mobile penetration, these indicators are misleading as they actually represent the number of SIM connections registered on a mobile network rather than people. In the note, they emphasised the importance of measuring unique mobile subscribers as opposed to SIM connections.
It makes a world of difference. In the September 2018 statistical release, the CA stated that mobile penetration surpassed the 100 percent mark mainly due to the fact that most users own more than one SIM card, either from the same or different service providers.
The CA went on to cite the Kenya Integrated Household Budget Survey (KIHBS) report released by Kenya National Bureau of Statistics (KNBS) in April 2018, which indicated that at least 30 percent of mobile users own more than one SIM card, which translates to an average of 1.3 SIM cards per subscriber.
Going by this figure, it means that just about 35 million Kenyans are subscribers. But that’s still high. According to the same KIHBS labour force report, adults above 18 years were just slightly above 21 million. Assuming that every adult above 18 years had a SIM card, it translates to two SIM cards per subscriber. If we were to drill down to the actual number of unique subscribers, the number of SIM cards per subscriber would be much higher. Consequently, to establish the accurate levels of mobile penetration, and as a precedent-setting move in matters best practice, the CA, in addition to the total number of subscribers, should consider disclosing the number of unique subscribers.
While multi-SIM is a market feature globally, a simple analysis of the local scene shows that multi-SIM is driven by two core factors, namely (i) the search for cheaper call rates (pricing); and (ii) a drive to navigate around the daily transaction limits imposed on telco-owned mobile money platforms. While fully cognisant of the fact that multi-SIM is not really a problem, it still triggers two policy discussions.
First is the prohibition of on-net discounts (which was also cited in the Market Study done by Analysys Mason). Indeed, MNOs have demonstrated a penchant to lower tariffs when their subscribers call within the network (on-net), but premiumise tariffs when they acquire calls/texts from other networks (off-net). Mobile terminal rates in Kenya are among the lowest in the world, there shouldn’t be price differentials between on-net and off-net rates.
Second, it is now imperative that operators and regulators escalate the discussions around establishing an optimum level in as far as daily transaction limits for telco-owned mobile money platforms is concerned, most notably M-Pesa and Airtel Money.