2008 was a dramatic year for Kenyan telecoms. At the start of the year there were only two mobileoperators, but by the end of 2008 this number had doubled to four. After France Télécom took over themanagement of Telkom Kenya and rebranded its products, it also launched a mobile network under theclassic France Télécom Orange brand, which became active in September 2008. In addition, afternumerous delays and some doubts about whether it would ever get off the ground, Econet finally openedits doors, so to speak, in December.
This new competition has certainly spurred on growth in the mobile market, and Kenya saw anexceptionally strong second half of 2008. The threat of new rivals seems to have spurred on Safaricomand Zain to renew their marketing. It also started something of a price war, with Zain offering aparticularly well received tariff with very low cost cross-network call charges.
With Econet also launching itself on a platform of bargain services aimed at the lower end of the market,ARPUs look to be further threatened, despite being already some of the lowest in Africa. The worst hasnot yet happened, however, as Zain managed to recover US$1 in its blended ARPUs for Q408, comparedto the previous two quarters.
Zain is also attacking the value-added services (VAS) market with renewed energy. This had previouslybeen the preserve of Safaricom, with its highly successful M-PESA mobile payments and bankingservice, and remarkable growth in prepaid 3G USB modem sign ups. Since our last update, however, Zainhas launched a service to rival M-PESA, called Zap, which offers mobile payment and international credittransfer services. BMI hopes that Zain can develop the service into an international money transferoffering that takes advantage of Zain’s wide reaching African and Middle Eastern networks, as this couldprove a very popular service. In addition, Zain’s One Network free roaming service, already popular withbusiness users, has been extended to include data services.
Since our last update there have been few major developments in the fixed-line and broadband sector, butwith the launch date for the Secom cable inching ever closer, BMI hopes to see exciting developmentslater in 2009.
Meanwhile, Kenya has slipped one place down the Business Environments Rankings, thanks to a reducedscore for country structure.
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