Mobile subscriptions fall in three months to December 2023 on Telkom Kenya Changes

By Monica MUEMA

Mobile subscriptions dropped in three months to December 2023 to 66.7 million in the latest quarter sector statistics report by the Communications Authority of Kenya (CA), a drop from 67.1 million Telcos held in the preceding quarter.

The drop has been occasioned after the American Towers Corporation (ATC) switched off its network towers, following the change in shareholding structure of Kenya’s third largest telecommunications company, Telkom Kenya.

“There was a decline in mobile subscriptions which is attributed to high churn vis-à-vis acquisitions and especially with regard to Telkom Kenya Limited. Consequently, mobile penetration rate declined by 0.8 percentage points to record 131.9 percent,” it noted.

Similarly, mobile money subscriptions dropped to stand at 38.0 million translating to a penetration rate of 75.1 percent during the quarter under review, with the decline attributed to the drop of number of mobile (SIM) subscriptions.

In October 2022, the Kenyan government acquired the remaining 60% of Telkom Kenya from Helios in a $50.4 million USD deal. At that time, the Kenyan government owned 100 percent of Telkom Kenya, this is after Jamhuri/Helios agreed to exit the struggling telco.

However, the government made a decision to amend the transaction to have another private investor to acquire Jamhuri/Helios’ majority stake. A competitive process to identify the new investor begun in January 2023, resulting in an evaluation process that recommended the Infrastructure Corporation of Africa LLC (ICA) of the United Arab Emirates to be the new majority shareholder in Telkom, based on the offer they put forward.

The offer by ICA included capital injection to fund Telkom Kenya’s critical infrastructure and the overall upgrade of the company’s capabilities, and also settle some of the outstanding liabilities of the company.

On the other hand, Airtel Kenya grew its share in the voice market by one percentage point during that period, eating into the shares of its main rivals Safaricom and Telkom Kenya.

Airtel increased its voice share to 36 percent during the quarter up from 35 percent in the preceding quarter. As a result, the voice shares of market leader Safaricom fell from 64 percent to 63.3 percent while the share of Telkom also fell from one percent to 0.5 percent.