Mobile Industry in Africa: Kenya's mobile market isheating up

amgoo.com /blog/mobile-industry-in-africa-kenyas-mobile-market-is-heating-up

Nov 19, 2014 6:54:10 AM

Kenya's mobile market, a hot commodity!

Tweet: With the number of smartphone shipments expected to reach 1.2bn this year , growth in themarket will be driven by emerging markets, due to a continued surge in sales and adoption of low-costEconomy ($75-$150) and Ultra-Economy (sub-$75) smartphones.

The mobile industry in Africa is one such market that has seen unprecedented growth in the past fewyears and is home to the world's leading mobile payments market, Kenya! A country of majesticplains and natural beauty, Kenya and its mobile industry have come a long way since strict governmentrestrictions were liberalized in recent times and is a sector that is still seeing upward growth.

Sustained growth in the mobile sector

In Q4 of the 2013-2014 financial year, mobile subscriptions grew by 5.6% to reach 32.2 million withSafaricom accounting for 20.8 million, Airtel 5.5 million, Essar 2.8 million and Telkom 2.2 million,according to the regulator. Network operators have consistently invested about a quarter of revenueinto network upgrades in recent years. The increase in mobile subscriptions, investment in 3G mobilebroadband services and mobile banking as well as a surge in data usage has brought in additionalrevenue for telcos, but with intense competition heating up the sector in many forms, Kenya's mobilefuture is in for quite the ride!

Healthy competition

Competition in the mobile industry is as fierce an industry as any out there and Kenya's operators arecertainly feeling the squeeze. With falling average revenue per user (ARPU) in the voice market, thegovernment taking a unique open-access approach with plans to licence a multi-faceted consortium tooperate 4G LTE networks, and regulators licensing three mobile virtual network operators, orMVNOs—Finserve Africa, Mobile Pay, and Zioncell Kenya, as well as the recent addition of Airtelbacked Kenya Airways (KQ) entering the foray, competition is at an all time high! But all this adds to thecompetitive mix and it is something that the Kenyan government backs.

According to Communications Secretary Fred Matiang’i, increased competition in thetelecommunications industry will ensure customers are able to shop around for the best service andprices, it will prompt operators to deliver quality services and investors will have the opportunity toexercise their creativity and investment capacity.

How can operators stay competitive?

With smartphones and particularly entry level smartphones set to infiltrate the mass market in thecoming months, the remainder of the populace to be connected presents an opportunity for operatorsthat are able to meet the demand. Increasing competition will allow end users to shop around for thebest deals and service and this is an area where operators can really state their dominance in themarket! Telcos need to be leveraging high quality, low cost devices to help them attract moresubscribers to their network. Affordable, feature rich 3G smartphones will continue to help driverevenue earned by mobile data subscriptions and operators can use these devices to help bridge thegap between smart and feature phone!

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Topics: Operators, Africa mobile industry