Kenya:Mobile money popular despite falling subscriber numbers


JANUARY 22,2013


Fewer customers used the service, but mobile transactions still recorded a 6.7 per cent jump

The number of people using mobile money services declined in the three months to September last year on the count of reductions in the number of subscribers on Airtel Kenya’s money transfer service.

A report from the Communication Commission of Kenya (CCK) showed that the total number of subscribers using mobile money services reduced by 200,000, which CCK attributed to a loss of customers by Airtel Money.

The total number of mobile money subscribers declined to 19.3 million in September compared to 19.5 million in June last year.

“The decline was as a result of a reduction in overall subscription level in Airtel Networks Kenya Limited during the period under review,” said the CCK report for the first quarter of 2012/2013 financial year.

But the decline in customers did not reflect in the transactions on mobile money. The amount of money deposited in mobile money accounts grew 6.7 per cent in the quarter to September, growing from Sh192 billion to Sh205 billion during the quarter.

“This growth indicates that the mobile money transfer service has become a key payments and transaction tool, mainly due to its easy use of applications, convenience and low cost value propositions,” said the CCK report.

Mobile penetration

The CCK report released yesterday also showed a bump in subscribers numbers which grew to 30.4 million, pushing mobile telephony penetration to 77.2 per cent up from 75 per cent in the quarter to June last year.

With the exception of Telkom Kenya (Orange), all mobile operators gained customers. Essar Telecom’s yuMobile was the largest gainer, growing 12.9 per cent in the quarter to add 343,651 new subscribers. Safaricom Limited gained 214, 228 while Airtel got 199,936 new customers.

Orange, however, lost 28,472 subscriptions, representing 0.9 per cent decline from the previous quarter. The company’s fixed service suffered a similar fate of decline in number of customers, with the total number of fixed lines falling 5.5 per cent to 248,300 fixed lines from 262,711 lines recorded during the previous quarter.

“Consistent and attractive promotions and special offers coupled with competitive retail tariffs could have contributed to the increase in subscriptions during the period,” said the report with regard to the growth in subscriber numbers.

Safaricom’s market share by subscription dropped to 63.2 per cent from 64 per cent during the previous period. Similarly, Telkom Kenya (Orange) market share declined by 0.3 percentage points to stand at 10.2 per cent. Airtel share increased from 16.5 per cent to 16.8 per cent, while Essar Telecom’s market share also increased to 9.9 per cent, up from nine per cent.

“The increase in market shares by Airtel and Essar may have partially offset the decline in market shares for Safaricom and Telkom (Orange),” said CCK. The amount of time spent by subscribers on phone increased from 71.2 minutes to 76.7 minutes per month up in the quarter. At an average calling rate of Sh4, this would roughly translate to an average revenue per user of about Sh310.

Internet capacity

CCK estimates the number of Internet users to have reached 13.5 million in the quarter to September from 12.1 million users in the previous quarter. CCK, however, notes that a vast majority of the Internet capacity available to the country through the undersea fibre optic cables remains unused.

“This increase is attributed to increased demand for Internet and data services, including use of social media especially among the youthful population. Competitive tariffs by the mobile operators, and aggressive promotional and special offers were also behind the increase in the number of Internet users,” said the report.

“Despite the increase in Internet subscriptions during the period, bandwidth utilisation only increased marginally by 0.3 per cent during the quarter. The utilisation in the quarter stood at 48.3 per cent. The unexploited capacity demonstrates the great potential that still exists in the Internet market segment.”




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