Drop in talk time sends Kenya’s telecom sector to drawing board

Kenya’s mobile telephony voice traffic reduced in the period between April and June 2012 by 6.9 percent to record 6.3 billion minutes, as compared to 6.8 billion minutes in the previous quarter, according to the fourth quarter telecommunications report by the industry regulator Communications Commission of Kenya (CCK).

This is despite a 1.7 percent increase in subscriptions from 29.2 million to 29.7 subscriptions. Over the same period, mobile penetration increased with the annual figures indicating access reached 75.4 percent, an increase of 11.2 percent from the year before and up 1.4 percent in the quarter.

With all these factors being positive, what could have led to a positive result? During the period under review, Safaricom and Airtel, the major telcos’ holding 80 percent market share, saw a drop of 37.6 percent and 5.3 percent respectively on on-net traffic leading to the drop. Similarly, the remaining two operators, Telcom Orange and Yu Mobile, recorded drop in traffic.

In the report, CCK urged the operators to come up with product innovations that could lead in subscribers calling more as the sector has seen increased promotions expected to increase talk time among subscribers with all networks taking different models.

Safaricom has chosen to reward customers depending on how long they speak with any calls above 3 minutes charged at KSh1 a minute, even as it reduced its off-net calling rate from KSh5 to KSh4 a minute.

Its competitors have however taken a different model with a flat rate cost to subscribers of various tariffs within their networks. Airtel has the product ‘Mi Ni 254’, which aims to have family members and close friends speak longer by charging KSh1 a minute all day and night on-net, while at the same time offering free social media access, free music listening and free access to its tunes.

Like Airtel, Orange has put a standard fee of KSH10 for voice, and data all day with an incentive of sending 20 free short messages to rival networks.

Yu, which has continued to register among the highest growths in market share in the past year, has started another promotion dubbed ‘Jichanue na Amua tariff’ offering free day calls, and charging KSh3 from 6pm to 6am.

As to whether the customers are warming up to the operators or as to which model is working, one thing is clear, customer demands are driving innovation in voice traffic and only the best products taking care of their personal needs will carry the day.

Posted in: Telecoms

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