Kenya’s Safaricom loses market share for fifth straight quarter
02 April 2019 - 15:09
byDuncan Miriri
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Nairobi — Kenya’s biggest telecoms operator Safaricom lost a further percentage point of subscriber market share in the three months to the end of December, its fifth straight quarterly fall, data from the sector regulator showed on Tuesday.
The firm, part-owned by SA’s Vodacom and Britain’s Vodafone, lost 0.9 percentage points of market share to 63.3%. This compared with a share of 71.9% in September 2017 when the losing streak started.
Safaricom did not comment on the figures ahead of its full-year results on May 2.
The company began losing share after opposition leader Raila Odinga called for consumers to boycott Safaricom, accusing it of playing a role in an August 2017 presidential vote whose outcome he successfully challenged in court.
Safaricom rejected the allegations, describing them as “callous and unnecessary”.
The losses have been sustained by aggressive competition from the local unit of India’s Bharti Airtel, the second biggest operator in the country. Airtel Kenya’s subscriber market share jumped to 23.4% at the end of December, from 14.9% in September 2017.
Airtel said in February that it had agreed to merge with number three operator Telkom Kenya, adding to pressure on Safaricom.
Investors have shrugged off the developments, however, with Safaricom’s shares rising 22% this year to trade at 28.25 shillings ($0.2804).
“Revenue share rather than subscribers is key,” said Eric Musau, a research analyst at Standard Investment Bank. The drop in share of users could also cut regulatory pressure on Safaricom, Musau added.
Kenya has one of the most advanced telecoms sectors on the continent, but Safaricom’s high market share has curbed competition and prompted the regulator to mull intervention.
According to regulator data in 2015, Safaricom enjoyed the lion’s share of revenue, with more than 90% in key categories such as voice calls. The latest revenue data was not available.
Both Safaricom and Airtel have been increasing their quarterly user numbers, but Airtel has reported faster growth in subscribers.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Kenya’s Safaricom loses market share for fifth straight quarter
Nairobi — Kenya’s biggest telecoms operator Safaricom lost a further percentage point of subscriber market share in the three months to the end of December, its fifth straight quarterly fall, data from the sector regulator showed on Tuesday.
The firm, part-owned by SA’s Vodacom and Britain’s Vodafone, lost 0.9 percentage points of market share to 63.3%. This compared with a share of 71.9% in September 2017 when the losing streak started.
Safaricom did not comment on the figures ahead of its full-year results on May 2.
The company began losing share after opposition leader Raila Odinga called for consumers to boycott Safaricom, accusing it of playing a role in an August 2017 presidential vote whose outcome he successfully challenged in court.
Safaricom rejected the allegations, describing them as “callous and unnecessary”.
The losses have been sustained by aggressive competition from the local unit of India’s Bharti Airtel, the second biggest operator in the country. Airtel Kenya’s subscriber market share jumped to 23.4% at the end of December, from 14.9% in September 2017.
Airtel said in February that it had agreed to merge with number three operator Telkom Kenya, adding to pressure on Safaricom.
Investors have shrugged off the developments, however, with Safaricom’s shares rising 22% this year to trade at 28.25 shillings ($0.2804).
“Revenue share rather than subscribers is key,” said Eric Musau, a research analyst at Standard Investment Bank. The drop in share of users could also cut regulatory pressure on Safaricom, Musau added.
Kenya has one of the most advanced telecoms sectors on the continent, but Safaricom’s high market share has curbed competition and prompted the regulator to mull intervention.
According to regulator data in 2015, Safaricom enjoyed the lion’s share of revenue, with more than 90% in key categories such as voice calls. The latest revenue data was not available.
Both Safaricom and Airtel have been increasing their quarterly user numbers, but Airtel has reported faster growth in subscribers.
Reuters
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