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Safaricom dominates Kenya as rivals stumble

Safaricom extended its lead in Kenya's mobile market during the third quarter of 2010, after competition from rival players failed to materialise, according to new figures published on Tuesday by Wireless Intelligence.

The operator's market share reached 82% during the three months ended 30 September. By comparison, its closest rival Yu has only an 8% share of the market.

Wireless Intelligence senior analyst Matt Ablott said the research firm expected the picture to have changed dramatically over the course of the last few months.

"When we last looked at the Kenyan market in March 2009, Safaricom's dominance was under threat from two new market entrants – Yu and Orange," he said in a research note.

Ablott said that rather than experiencing a period of fierce competition, Safaricom has instead maintained its dominance of Kenya's mobile market due to being the country's sole 3G operator, heavy investment in new network technologies including WiMAX and fibre, and the popularity of its M-PESA mobile payments service.

According to Wireless Intelligence, there were 13.5 million registered M-PESA users at the end of the third quarter – over 80% of Safaricom's customer base.

"The success of such services has enabled Safaricom to offset declines in traditional mobile telephony – both voice and termination rates have fallen by 50% this year," he said.

Safaricom's closest rival until recently was the Kenyan arm of Kuwait's Zain, said Wireless Intelligence; however, its market share has fallen 40% since Q3 2009, shedding half a million customers during the third quarter alone.

However, since being sold to India's Bharti Airtel as part of a $10.7 billion deal that saw Zain exit 15 African markets, the operator has been awarded Kenya's second 3G licence and is due to begin offering services in the first quarter of next year.

"Safaricom's greatest threat is likely to come from Bharti," said Ablott.

"The Indian firm is already in the process of implementing its signature streamlined business model across its new African footprint and has the potential to mount a major challenge to Safaricom's dominance," he said.

Meanwhile number two player Yu is due to see a shake-up of its ownership structure, said Wireless Intelligence, after parent company India-based Essar Telecom Kenya's plan to take 100% control of the operator fell foul of local foreign ownership restrictions that require domestic firms to control at least 30% of the operator.

Источник: Total Telecom

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