Airtel connects 5G in battle with Safaricom


An Airtel shop in Nairobi. PHOTO FILE | NMG

Airtel Kenya has upgraded some of its sites with fifth-generation (5G) mobile Internet services as the telecoms operator prepares to battle Safaricom for a larger share of the fast-growing data business.

Airtel said the deployment of 5G-ready networks would help it capitalise on the rising mobile Internet demand in the country, just days after Safaricom #ticker:SCOM became the inaugural operator to offer the superfast services in the region.

The Kenyan unit of India’s Bharti Airtel says it has over 600 sites in Nairobi, Mombasa and Malindi on 5G network.

“These 600 sites are now 5G-ready. We don’t have to make any further modifications to the network. We will just get the spectrum and decide when to switch on,” Airtel Kenya managing director Prasanta Das Sarma told the Business Daily in an interview.

Airtel Kenya, which has 26.5 percent stake in the mobile data segment, wants to boost its data business amid increasing demand due to the Covid-19 pandemic that is forcing people to work and learn from home.

The new 5G network will give consumers Internet speeds of 700 megabits per second, more than three times faster than the current 4G network, allowing operators to offer an alternative service for homes and offices in areas which are not currently covered by its fibre network.

This is the market that Safaricom, which is the market leader in the mobile data segment in Kenya, with 67.6 percent of total users as of December, is eyeing.

The Nairobi bourse-listed firm launched 5G in five counties, including Nairobi, Kisumu and Kisii, and seeks to expand the high-speed Internet to 150 sites in nine urban areas in the next 12 months.

Both Airtel and Safaricom are aiming to rev up their data business to offset sluggish growth in mobile calls, where they are seeing a small revenue growth due to saturation.

Network congestion

Subscribers who want to use the superfast Internet will need to acquire new handsets that are compatible with 5G before they can enjoy the service, which offers much faster data download and upload speeds that ultimately ease network congestion.

Airtel reckons it will not be in a rush to switch 5G network on, citing high handset prices.

Currently, 5G phones in the Kenyan market are few and expensive. For instance, Huawei Mate 30 Pro retails at about Sh70,000 while Huawei P40 goes for Sh98,000.

Mr Sarma told Business Daily that the switch to Airtel’s 5G network will happen in one to two years when the firm expects the cost of handsets will fall.

“The 5G handsets right now are obviously very costly and see few buys. We feel that a reasonable price will start coming in one and a half to two years,” said Mr Sarma.

“That is the time we feel we will be able to switch on our 5G network. But if things happen faster, we are ready for it.”

Just like Safaricom, Airtel is betting on data and hopes the increased smartphone usage will boost revenues and push it to profitability.

Airtel has been gaining market share in the data segment over Safaricom in recent years.

Its market share gains began after opposition leader Raila Odinga called for consumers to boycott Safaricom, accusing it of playing a role in the August 2017 presidential vote whose outcome he successfully challenged in the Supreme Court.

An aggressive hunt for subscribers by Airtel Kenya, the second biggest operator in the country, has seen it sustain the pressure on Safaricom.

Airtel’s subscriber market share on mobile data users jumped to 26.5 percent at the end of December, from 15.7 percent in September 2017.

The number of mobile data users in Kenya has increased to 43.7 million in December from 30.6 million in September 2017, according to the Communications Authority of Kenya.

Currently, only three percent of the world’s mobile phone connections are on 5G, with Asia leading at five percent, according to data by GSM Association— a trade association that represents mobile operators worldwide.

GSM Association estimates that 5G uptake will be on the rise, covering about a third of the world’s population by 2025 as low-cost devices and smartphone financing schemes accelerate adoption.

Sales war

Chipmaker Qualcomm has indicated that 5G could achieve browsing and download speeds about 10 to 20 times faster than those offered by 4G.

That would allow a consumer to download a high-definition film in a minute or so. Mobile gamers will also notice less delay -- or latency -- when pressing a button on a controller and seeing the effect on the screen.

Similarly, mobile videos should be near instantaneous and glitch-free while video calls would become clearer and less jerky under the 5G network.

This is the market that Safaricom and Airtel are eyeing in their quest to increase sales from its data division.

Kenya’s telephony market has evolved over the past five years, with growth in data sales increasing faster than revenues from voice.