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Telcos market shift as Airtel gains voice traffic, Safaricom drops

Customers are served outside an Airtel shop in Mombasa. PHOTO | kevin odit | NMG
Customers are served outside an Airtel shop in Mombasa. PHOTO | kevin odit | NMG 

Telecoms operator Airtel picked up more subscribers and won a bigger share of the mobile voice market in the last quarter of 2017, in a significant push against market leader Safaricom’s #ticker:SCOM dominance.

Industry data released by the Communications Authority of Kenya (CA) shows that Airtel’s share of the voice traffic swelled to 22 per cent, up from 13.5 per cent in a similar period the previous year, making it the biggest gainer of the market shift.

Market leader Safaricom’s share of the voice traffic dropped to 72.5 per cent in the quarter to December 2017, from 80.6 per cent in a similar period a year earlier.

This represents a market drop of 8.1 percentage points and comes against the backdrop of calls for regulatory intervention to cut Safaricom’s market dominance.

Telecoms sector watchers said, the market-share changes send the clearest signal that a correction of market power was underway, making it unnecessary for regulators to slow down Safaricom using price controls.

Safaricom’s voice traffic has in recent years been in a state of flux — expanding and slipping narrowly on a quarterly basis — making it difficult to tell whether the current marketshare changes will last.

Third-placed Telkom Kenya, said to be negotiating a joint operation plan with Airtel, also suffered a market-share loss of 0.2 percentage points to 5.2 per cent in the period.

The newly released data shows that Safaricom’s customers marginally cut their talk time, reducing the minutes count by two per cent to 8.5 billion minutes in the three-month window from 8.7 billion minutes in a similar period a year earlier.

Airtel’s total traffic volume expanded 78 per cent in the period to stand at 2.5 billion minutes compared to 1.4 billion minutes recorded in the last quarter of 2016, the fastest upsurge since the CA started publishing the numbers.

Telkom recorded a total of 608 million minutes.

Airtel last year introduced a voice package that slashed charges on calls to rival networks by a third to Sh2 per minute.

Safaricom charges Sh4 a minute to call within and outside its network between 8 a.m. and 10 p.m. and Sh2 a minute for rest of the hours.

Last year’s elections also posed headwinds for Safaricom after the Opposition asked its followers to boycott the telecoms operator’s services, accusing the company of colluding with the government to rig the August 8 elections.

Safaricom, nonetheless, grew its customer base by 1.8 million subscribers in the period to 29.5 million, while Airtel recruited half a million users for a total of 7.3 million. Telkom had 3.8 million customers by end of December.

Safaricom, however, remains the only profitable telecoms company in Kenya, a position that has attracted attention to its dominant market position.

Airtel’s most recent financial results show that the company is operating deep in the red with current liabilities that far outweigh its assets. 

Voice revenue remains Safaricom’s biggest income stream, and its market loss in the segment is a source of concern even though the company maintains a tight stranglehold on the mobile money transfer market with M-Pesa.

Rivals have in the past complained that Safaricom’s dominance stifles competition, calling for a split of its businesses. Safaricom maintains it is yet to abuse its dominance.

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