Mobile subscriptions close to saturation

The mobile telephony market is close to maturity, with nearly all potential customers signed up to the country’s telecoms operators, according to the Communications Authority (CA).

The finding means that the industry will rely more on increased usage of voice, messaging and data services from existing customers for earnings growth as opposed to simply adding new users.

Data from CA shows that the number of new SIM card holders registered in the three months ended September dropped to 1.08 million, marking the third successive drop.

This brought mobile subscriptions penetration to a new high of 112 percent, indicating that a significant number of the uptake is due to people holding multiple SIM cards.

“As witnessed during the last three quarters, net SIM additions declined to 1.08 million during the period under review from 1.1 million SIMs posted during the previous quarter,” CA says in its latest quarterly report.

“This could be an indication that the market is almost reaching saturation in terms of uptake of SIM cards.”

The data shows that there were 53.2 million subscribers in the review period, with Safaricom taking a 64.5 percent market share, followed by Airtel (24.6 percent) and Telkom (6.7 percent).

Mobile subscriptions uptake first hit the 100 percent mark in September 2018, ushering in a period of slower growth.

The telcos have spent tens of billions of shillings to expand and upgrade their network coverage, drawing in new customers.

With most potential customers signed up, earnings growth will now be driven by retaining customers and encouraging them to spend more on existing and new services.

Some customers have multiple SIM cards and buy specific services such as data from providers with lower pricing.

BETTER SIGNALS

“SIM penetration in the country remains above 100 percent due to multiple SIM ownership among users of cellular services,” CA said.

“The high mobile SIM penetration is attributed to the increasing availability and access to mobile networks signal and a variety of convenient mobile services.”

Some of the operators have turned to lowering prices as a means of poaching customers and encouraging increased usage of their services.

Safaricom, for instance, slashed its prices per MB by 42 percent in the year ended March 2019.