Airtel cuts down Safaricom’s voice, mobile data, SMS grip

Airtel Kenya Ltd headquarters located along Mombasa Road, Nairobi. FILE PHOTO | DENNIS ONSONGO | NMG

Kenya’s second-largest telco Airtel Kenya has chipped away at Safaricom’s dominance in four out of the six major battlefronts including voice, mobile data and SMS markets over the past five years as the loss-making firm closes the gap amid a vicious fight for control of the local mobile phone services.

An analysis of data shows Safaricom’s dominance in voice shrunk to 65.9 percent by December 2022 from a record high of 80.6 percent five years ago while its mobile internet market dropped to 65 percent from 72.8 percent in the period.

Airtel’s share of the voice market more than doubled to 32.2 percent in December last year from 13.5 percent five years ago while its share of mobile data hit 27.9 percent from 18.5 percent in a similar period, according to data from the Communications Authority (CA).

The telcos have over the years been embroiled in a vicious pricing war, a battle marked by offers on calling tariffs and bundled SMS, calls and mobile internet.

CA attributed Airtel’s growth in the voice market for both on-net and off-net calls, to lower calling rates that have helped the telco eat into Safaricom’s dominance.

“Customers on Airtel networks spent more time on a single on-net call averaging 2.8 minutes,” CA says in the report for the period that ended December last year.

Further, Telkom Kenya Ltd and Equitel customers recorded the highest average minutes of use per off-net call at 1.3 minutes, mainly attributed to the lower calling rates offered by the operators.”

The drop in Safaricom’s dominance of the voice, mobile internet and SMS comes amid a push by Airtel to have the telco declared dominant.

Read: Airtel follows Jamii, Safaricom in e-SIM roll out

But the Competition Authority of Kenya has turned down Airtel’s plea, saying that Safaricom’s market share has declined in recent years and that competition remains healthy.

Airtel last year sought the support of Senators to compel CAK to declare Safaricom, the market leader, as the dominant player, saying it is the first step to addressing the perceived uneven operating environment.

The CA data shows that Safaricom has, however, tightened its grip on mobile money through M-Pesa besides turning its eyes to the largely untapped fixed internet market for homes and offices.

M-Pesa accounts for 96.8 percent of the mobile money market, up from 78.06 percent five years ago, in a period where Airtel Money has significantly lost ground while others such as Equitel and Mobi Kash have pulled out of the market.

Airtel Money’s share of the mobile money market shrunk to 3.1 percent in December last year compared to 9.3 percent five years ago, even as the telco struggles in the wake of M-Pesa’s growth.

CA data shows that Safaricom is inching close to controlling half of the market for fibre to homes and offices, a market that Airtel has not ventured into.

Safaricom now controls 46.1 percent of the share or 372, 872 connections, marking a jump of 176 percent from 16.7 percent five years ago.

Wananchi-owned Zuku, Safaricom’s closest rival in the market controls 31.1 percent of the fixed internet market or 251,340 connections, a drop from the 36.7 percent share that it controlled five years ago.

Telkom Kenya’s share of the fixed internet market fell to 0.6 percent in December last year from 1.3 percent five years ago, highlighting the struggles of telcos in cutting Safaricom’s dominance.

Safaricom entered the fibre-to-homes and business market in 2017 and has over the years pumped billions of shillings into the service helping it dislodge Zuku to become the leading player.

Zuku had been the market leader before Safaricom’s entry and the pair has since been caught in pricing wars that have lowered the cost of fixed internet besides offering discounts of one month to new connections.

Safaricom’s growing investments in the fixed data market come at the back of a sharp drop in its control of the SMS market and mobile subscriptions.

The telco’s market control of the SMS dropped to 89.3 percent in December last year from 95.1 percent five years ago, in a period when Airtel’s share more than doubled to 10.4 percent from 4.4 percent.

Read: Safaricom leads stock market rout at the NSE

The growing popularity of Airtel cut Safaricom’s share of active SIM cards to 66 percent from 69.1 percent. Active SIM cards on the Airtel network grew to 26.3 percent from 17.2 percent in the same period.

Telkom Kenya’s share of active SIM cards dropped to 4.9 percent in December last year from nine percent recorded five years ago.

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