Safaricom loses some of its market share to rivals

Kenya’s mobile services leader Safaricom has seen a fall in subscribers, according to a new Communications Commission of Kenya (CCK) report, with rival telcos escalating competition in the sector with new products and advertising campaigns.

The report, dubbed “Quarterly Sector Statistics Report”, for the period between March 30 and June 30 showed that Safaricom recorded a decline in mobile subscriptions of 67,719, which represented 0.4 percent drop from the previous quarter. Orange Telkom also saw a fall in subscribers.

“The decline in the Safaricom and Telkom’s market share was taken up by Airtel and Essar that saw their market shares rise by 1.2 percentage points and 0.3 percentage points to reach 16.5 percent and 9.0 percent, respectively at the end of the quarter,” the report said.

It continued to say: “Airtel recorded the largest gains in new subscriptions of 430,726 representing growth of 9.6 percent over the previous quarter followed by Essar that gained 105,389 subscriptions (4.1 percent growth) and Telkom which gained 23,394 subscriptions (0.8 percent growth).”

Though the company remains the dominant telco in the market, with 64 percent of the total 29.70 million mobile subscribers, Safaricom has been facing a lot of competition of late, with other telcos investing more in advertisements and new products to attract more customers to their networks.

“In the next financial year, we will consolidate our position as market leader by being more innovative and staying closer to our customer,” Nicholas Nganga, Chairman Safaricom said earlier this year when the company was releasing its audited financial report.

Yet the year has been a challenging one for the company. Safaricom has reviewed its M-Pesa transfer charges, something that did not go well with its some of its customers who regretted that it made it more expensive to transfer huge sums of money.

Airtel, on the other hand, continued charging less to transfer and withdraw, and until recently, decided to make sending money free to all networks.

Call charges with Safaricom remain high, even as rivals continue dropping their call rates and offering subscribers free calls day and night. Safaricom On-Net charges have been increased to KSh4 per minute, while Airtel charges a flat fee of KSh3 per minute, again offering a cheaper option.

Safaricom did unveil a new tariff that saw the cost of calls reduce by a shilling for the first 3 minutes, then a flat rate of 1 shilling for all minutes thereafter. However, this offer is only valid for Safaricom to Safaricom calls from 6 a.m. to 6 p.m.

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