Low tariffs boost subscriber numbers

February 3, 2011

, NAIROBI, Kenya Feb 3 – The first quarter of the 2010/2011 financial year has witnessed an upswing in mobile penetration with the Communications Commission of Kenya reporting a 9.5 percent increase in mobile subscribers.

In the period between July and September the number of subscribers rose from 20.1 million to 22 million.

“This is the highest growth that has been recorded over the last three quarters,” the CCK said in its report.

The growth in subscribers could be attributed to a steady decline in mobile tariffs during the period.  The regulator has been implementing the interconnection determination that saw mobile termination rates reduced to Sh2.21 from Sh4.42.

That has seen mobile operators engage in stiff competition to grow their market share.

Since bringing on board new investors Airtel Kenya (formerly Zain), has been at the forefront of lowering tariffs as they look to gain market supremacy.

During the quarter, Airtel Kenya gained 4.4 percent market share and now controls 13.5 percent of the market having attracted 1,143,353 new subscriptions.

Telkom Orange also gained 1.3 percent and now has 875,592 customers up from 552,294.

Market leader Safaricom saw their market share during the quarter eroded from 80.7 percent to 75.9 percent with 16.7 million customers. During the period under review, the operator attracted 473,979 new customers.

Essar Telecom’s, Yu, was the biggest looser during the period as it lost 26,266 customers with a total subscriber base of 1.4 million customers.

“The number of mobile subscriptions has tripled in the last five years from 7.3 in 2006 to the current 22 million subscriptions. With competitive pressure likely to remain intense among the four service providers, growth in subscriptions is expected to continue,” the report reads.

The fixed lines declined by 2.7 percent from 234,522 to 228,391 lines. Similarly, the fixed wireless recorded a 37.2 percent decline from 225,592 in the previous period to 141,580 during the period under review.

Overall tele-density rose to 56.9 per cent from 53.3 percent June 2010, with mobile services accounting for 55.9 percent.

A total of 6.63 billion minutes of local calls were made on the mobile networks against 6.05 billion in the previous quarter, representing 9.6 percent increase. Similarly, the number of voice minutes received on all mobile networks was 6.63 billion minutes, representing 97.5 percent increase from the same period of the previous year.

The number of SMS recorded during the quarter was 740 million text messages compared to 769.6 million text messages sent the previous quarter.

The upswing in mobile subscriber numbers had a significant impact on internet penetration during the first quarter. The total number of internet subscriptions registered 4.3 percent growth from 3.09 million in the previous quarter to 3.2 million. The number of internet users was estimated at 8.69 million from 7.8 million users in the previous quarter.

Terrestrial mobile/data subscriptions accounted for 3.1 million customers. During the period under review, the percentage of population that had internet access reached 22.1 percent from 19.9 per cent reported in the previous quarter, representing an increase of 2.2 percentage points.

“The mobile/data subscriptions have continued to experience significant growth, driven by consumer demand as well as the need by operators to diversify services as a result of intense competition in the voice market,” the regulator said.

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