Mobile Data Wars

Challengers Loosen Safaricom’s Vice-Like Grip On Kenya’s Mobile Data Market

By  |  January 7, 2021

Safaricom has a near-monopolistic presence in Kenya. Not only does it control between 65 percent to 70 percent of Kenya’s telecom subscribers market share at any given time, but it’s ubiquitous mobile money service, M-Pesa, accounts for nearly 99 percent of mobile money transactions in Kenya.

And as would be expected, Safaricom also dominates the market for mobile data in Kenya. But for what seems like the first time in a very long time, Kenya’s leading telco appears to be losing ground on this front, however so slightly.

Mobile data make up 98.5 percent of Kenya’s internet market and last year, it grew even more with the forced introduction of Covid-19 control measures, including working and schooling from home.

And as the market for internet grew to 43.5 million subscribers in the quarter to September 2020, as reported by the Communications Authority of Kenya (CA), both Airtel Kenya and Telkom Kenya gained on Safaricom, however marginally.

Airtel and Telkom are the two closest competitors to Safaricom in Kenya, even though they trail the dominant telco by some distance. Last year, talks of a merger between Airtel and Telkom to form an entity strong enough to challenge the market leader was mooted for a while, but the plug was pulled eventually.

The deal fell through on account of “unacceptable conditions placed on the proposed merger besides delays in receiving regulatory approvals.”

However, that didn’t stop both telcos from claiming a small share of Safaricom’s pie. Data from the CA suggests that from July to September, Safaricom lost 1.2 percentage points in market share of mobile data subscriptions, but was still the undisputed leader commanding 67.5 percent of subscribers.

Airtel upped its market share to 26.8 percent while Telkom Limited rose to 5.4 percent. On the other hand, Equitel lost 0.1 percentage point to post the least market share of 0.3 percent.

“Safaricom PLC lost 1.2 percentage points in market shares for mobile data subscriptions to record the highest share at 67.5 percent. On the other hand, Airtel Networks Limited and Telkom Kenya Limited gained by 0.8 and 0.4 percentage points to record 26.8 and 5.4 percent shares, respectively,” CA said in the statistical data.

As the CA highlighted, the internet/data market witnessed positive growth with rising dependence on digital platforms for work, learning, healthcare, shopping, and entertainment. CA also said that home and office internet connections also surged during this period. And this had something to do with restrictions that were forced by the pandemic.

On the surface, it neither seems like a lot of ground lost by Safaricom nor does it look like a lot of ground gained by the competing telcos in Kenya, but it’s a development that is in keeping with a recent trend that has seen the market leader give up ground continuously.

In its report released in July 2020, Safaricom revealed that headline market share of customers has been steadily eroding from a high of 70 percent in FY17 to an estimated 65 percent in FY19.

According to the statistics from the CA also released in July 2020, the firm’s market share in mobile subscriptions stood at 64.8 percent recording a 0.3 percentage points decline. Safaricom had 35,607,302 subscribers in March 2020 up from 35,335,107 in December 2019 recording a slow growth of 1.2 percent.

And this trend now appears to have extended into the mobile data market, though only time can tell if this is just a blip or the first signs of an actual slip.

Featured Image Courtesy: The Economic Times

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