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Safaricom’s market share shrinks as Airtel, Telkom gain

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By Steve Umidha

Kenya’s biggest telecoms operator Safaricom lost further percentage points of subscriber market share in the period to the end of June 2020, its seventh straight quarterly fall, data from the sector regulator for the fourth quarter report for the financial year 2019/20 shows.

The firm, part-owned by South Africa’s Vodacom and Britain’s Vodafone, shed 0.3 percentage points in market shares to post 64.2 percent share in mobile subscriptions, while Airtel Networks Ltd and Telkom Kenya Ltd on the other hand gained by an equal margin of 0.2 percentage points to record 26.8 percent and 6.0 percent shares respectively.

Safaricom’s market share stood at 71.9 percent as of September 2017 when the losing streak started.

The company began to lose market share after opposition leader Raila Odinga called for consumers to boycott the brand during the heated political year, accusing it of playing a role in an August 2017 presidential vote whose outcome he successfully challenged in court.

Also felt to have hit Safaricom – which is still the dominant player in the market is Airtel’s aggressive advertisements strategies in the last three years geared towards wooing customers to the network.

The merger between Airtel and Telkom to form the second largest network in the country had also been felt would shake the market even further – but Telkom Kenya bolted out two months ago.

The intricate process, experts believe would have seen Airtel and Telkom, Kenya’s second and third largest telecoms companies respectively, merge into a single company collapsed this August due to delays in the approval process, an offhand admission the two companies communicated in separate statements.

“After carefully reviewing the available options, Telkom has opted to adopt an alternative strategic direction and will no longer be pursuing the proposed joint venture transaction. This decision has been mutually agreed with Airtel Networks Kenya Limited,” said Telkom Kenya chief executive officer Mugo Kibati at the time saying the firm would seek alternative strategic options.

According to latest data from the Communications Authority of Kenya Safaricom controls more than 60 percent of Kenya’s mobile subscriptions market while Telkom Kenya has 26.6 percent market share.

The deal, whose terms were never disclosed to the public, would have created a stronger challenger for the industry leader, Safaricom. Telkom Kenya blamed its rival Safaricom for intentionally delaying its merger plans with Airtel Kenya.

“We believe that our friends Safaricom want to delay the process, it is the dominant player and clearly don’t want to see the sector grow,” said Mugo Kibati, last year, adding that such a move would monopolize the sector and stifle smaller players’ survival.

Safaricom is the industry’s dominant player in terms of customers and revenue share.

The latest data by CA also shows that, as at 30th June 2020, active mobile money subscriptions stood at 30.5 million, whereas active mobile money agents stood at 223,184. M-Pesa continued to dominate the mobile money service with a market share of 98.9 percent.

During the period, statistics further show that more Kenyans preferred making calls on Airtel Networks which had the highest duration of on-net minutes per call at 4.1, while Telkom Kenya recorded the highest duration of off-net minutes per call at 1.4 due to relatively low tariffs offered by the operator, compared to Safaricom which recorded the least duration of on-net and off-net calls at 1.3 and 0.9 respectively.

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