Safaricom 5G users to pay higher mobile data tariffs

From left: Former Safaricom chairman Michael Joseph, Communications Authority director-general Ezra Chiloba, marathon star Eliud Kipchoge and the telco’s CEO Peter Ndegwa when the firm announced the roll-out of 5G internet on October 27, 2022. PHOTO | DIANA NGILA | NMG

Safaricom customers with 5G-enabled smartphones will pay higher tariffs for the high-speed mobile data services that the firm plans to roll out in December.

The giant telco will start selling super-fast Internet to customers with fifth-generation network-compatible smartphones before the end of the year after making the services available on Wi-Fi for businesses and homes on Thursday.

The expansion of the high-speed Internet network will equip more individuals and enterprises with 5G for use at work, at home and when on the move, helping Safaricom to tap into the burgeoning mobile Internet adoption in the country.

But the consumers on the 5G network will have to pay higher Internet tariffs compared to those offered on 3G and 4G networks to reflect the billions of shillings spent on the infrastructure upgrade.

“Plans are already underway to provide 5G data packages for mobile Internet which will be ready by December,” Safaricom chief executive Peter Ndegwa said, without fleshing out details.

Sources, however, said the cost of accessing 5G Internet on the phone will be higher and different from that for browsing on 4G-enabled devices. Currently, the rates for 4G and 3G are similar.

Safaricom has become the first telco in the Eastern Africa region to commercially launch 5G high-speed internet service following trials that started in March 2021 within 15 sites in major urban centres which routinely witness increased data traffic.

The service will, however, be initially available for Wi-Fi subscriptions by homes and businesses within 35 5G sites spread in Nairobi, Mombasa, Kisumu, Kisii and Kakamega.

Safaricom plans to scale up the 5G sites to 200 by next March, aiming to connect about 10,000 homes and businesses with the super-fast Internet, which has been powered by infrastructure built by China’s Huawei and Finnish-controlled Nokia.

The initial focus on 5G Wi-Fi rather than mobile is because there are still relatively few 5G-compatible devices in Kenya, the company said.

Out of nearly 27 million smartphones in use in Kenya, Mr Ndegwa said only about 200,000 are 5G-compatible because of the high costs of such devices.

But prices are coming down quickly and companies such as Safaricom are expanding their financing models which should expand access, he said at the launch.

Currently, 5G phones in the Kenyan market are retailing at more than Sh80,000.

The high prices may be a put-off for millions of subscribers willing to switch from 4G phones to 5G despite the increased appetite for services such as ultra-high video resolution streaming and real-time 3D gaming.

The 5G service is a central part of Safaricom’s attempts to further expand its data business to counter slower growth in voice calls revenue.

“5G is not any other form of connectivity, it is a different form of connectivity. It is a different world altogether,” Communications Authority of Kenya director-general Ezra Chiloba said.

“But it is not a replacement for 4G. From our own analysis … they are going to operate simultaneously, only that the 5G component is going to transform how we use and experience the power of data.”

Customers in covered zones looking to be hooked to the 5G Wi-Fi will need to acquire a compatible router for Sh25,000 and a further Sh5,000 for one-off set-up costs.

Safaricom has given clients the option of signing up for a binding 36-month contract to remain subscribed to the services to get the 5G router for free.

The cost of monthly Wi-Fi bundles ranges from Sh3,499 for Internet speeds of 10MBPs to Sh5,999 for 40MBPS and Sh14,999 for a 100MBPs subscription.

“We view 5G as being critical in delivering new solutions that will address economic development in healthcare, manufacturing, infrastructure and delivering of government services,” Mr Ndegwa said. “It will impact the lives of different people in many ways and ensure that we are at par when it comes to digital technology [with advanced economies].”

Safaricom’s revenues from voice grew 0.8 percent to Sh83.2 billion in the year to March while M-Pesa jumped 30.3 percent to Sh107.6 billion. Mobile data was up 8.1 percent to Sh48.4 billion.

Mr Ndegwa said the majority of Safaricom customers, about 15 million, are still on the 2G network — designed for voice services— and are missing out on high-speed Internet services.

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