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The Opportunity Telkom Kenya had to win over 5 million new subscribers but squandered

Written by
Telkom Kenya
  • 5 months ago
  • Posted: June 16, 2017 at 5:50 pm

June 6 2017, that’s the date Telkom Kenya had the biggest opportunity to propel itself from third position to the second largest teleco in Kenya, but the once a upon a time monopoly in Kenya’s telecommunication sector squandered that one chance. Going by the interest Kenyans showed on Telkom Kenya on the day of their rebranding, by now Telkom Kenya could have registered more than a million new and permanent subscribers – but only if they had what Kenyans are truly looking for. In one year or so, the Opportunity Telkom Kenya had could have won them more than 5 million new subscribers.

Kenyans, 27.7 million of them, are in Safaricom, yet both Airtel Kenya and Telkom Kenya seem not to understand why. The two trailing mobile telecommunication providers seem to think that Kenyans are stuck with Safaricom due to Safaricom’s mobile money product – MPESA.

Over the years, Airtel and Telkom Kenya have pushed the mobile industry stakeholders specifically the Communication Authority to force Safaricom to relinquish the exclusivity agreement Safaricom had with MPESA agents, have MPESA operate as an entity separate from Safaricom, and lastly allow for cross platform mobile money transfer at no additional costs.  In July 2014, Safaricom would soften from the hard position it had taken on Safaricom agents to allow the competing telecos to also use the Safaricom agents for their own mobile money services.

With the move to allow competing telecos to use Safaricom agents for mobile money transfer, we expected mobile money offered by both Airtel and Telkom Kenya to exponentially grow and probably catch up with MPESA, especially given the affordable rates the two telecos offered on their respective mobile money platforms. The growth was registered, but not at the exponential expectations that we had. This can be seen in the market share statistics from Communications Authority. The statistics say that by the end of second quarter of 2016/2017 financial year, Safaricom controlled 65% of the mobile money market down from 74% market share the teleco had at the end of June 2014.

The sluggish growth both Airtel and Telkom Kenya have had in the mobile money sector forced the two to further push for the cross platform money transfer, a demand that Safaricom has since bowed down to. The demanded cross platform money transfer should go live around July this year. Despite these changes in mobile money, Safaricom still remains the dominant player by mobile subscriptions; including being the teleco that continues to receive more new subscribers on its network compared to all other telecos combined.

For example, by June 2014, Safaricom had 21.8 million subscribers, Airtel had 5.4 million subscribers whereas Telkom Kenya had 3 million subscribers. By the end of second quarter of 2016/2017 financial year, Safaricom’s subscriber base had grown to 27.7 million subscribers, an increase by almost 6 million new subscribers in under three years. On the other hand, Airtel’s subscriber base increased by only 1.4 million new subscriptions whereas Telkom Kenya’s subscriptions decreased by about 200,000 subscribers. It is therefore obvious that mobile money is not what makes Kenyans stick to or prefer Safaricom.

Obviously it is not the cost of Safaricom services either that keeps Safaricom subscribers stuck to the teleco, as the teleco has one of the most expensive offers for voice, text and data services. What makes subscribers prefer Safaricom network are two things:

1. Availability of quality services across the country and

2. Customer care services that actually solve customers’ problems.

Telkom Kenya had the opportunity to tackle these two items headon; and be able to get the much desired propellant that would have pushed them towards Safaricom, but they squandered the opportunity.

Quality of services across the country

Shortly before the rebranding event that Telkom Kenya held on June 6th 2017, the teleco had hinted that it had spent some Shs 5 billion to upgrade its networks to 4G services in major towns of Kenya. This was one of the most strategic moves the teleco made, but ten days after launching the new Telkom Kenya, we are discovering that these networks were upgraded at wrong places.

In the major towns where these networks were upgraded, including Nairobi, Mombasa, Kisumu, Nakuru, Kericho, Eldoret and a few others, the upgrades were concentrated around the towns CBDs, whereas the residential estates were sidelined. Targeting CBD with the upgrades was a miscalculation, as the data demands are mostly not within CBDs.

What Telkom Kenya ought to have factored in is that majority of those who demand mobile data do so at home. This is because when the working class are in CBD, they are able to either access WiFi services or use some other forms of office Internet. Those who are in CBD but don’t have the WiFi or the office Internet may be too busy even to get time for Internet browsing.

When these people go back home in the evening, that’s the time their demand for Internet services peaks. However, most Kenyans are unable to browse at home as they would wish to partly because the data services are unavailable, or are too expensive.

On the pricing part, Telkom Kenya did great by introducing the Home Plan that offers remarkably affordable 4G Internet, in most cases the Home Plan data are a third the cost of similar data offers by Safaricom. The problem is, the Home Plans are not available for the typical Telkom Kenya subscriber. For you to enjoy the Telkom Kenya Home Plan, you need to buy a special SIM card called the Home Talk line. Telkom Kenya explained that to me through their tweeter customer care service:

 

Restricting the beautiful Home Plan services means many like me who rushed to buy the Telkom Kenya ordinary SIM cards will dump them immediately they realize they are unable to access the Home Plan data bundles, that also include their Unlimited Internet offer.

On quality of services, what Telkom Kenya ought to have done was to ensure that every estate in the major towns have access to strong 4G network, and secondly they should have ensured every individual SIM card could access the beautiful Home Plan Internet – in that order. Given the massive spending required to upgrade the networks to 4G, Telkom Kenya could have chosen to upgrade the 4G in Nairobi estates first, then slowly roll out to the towns – probably in a span of one year. Right now, the demand for Telkom Kenya’s Internet remains within the estates that hardly have quality 4G Internet. For example at my place there is 4G Internet right outside the house, but since the 4G tower is probably near CBD, the signal strength cannot serve me indoors.

Customer care that actually works

The strength of Safaricom, other than the strong network it has across the country, is the deployment of customer care that actually works. A customer care that actually works has three ingredients:

  1. Warmth and friendliness
  2. Promptness
  3. And ability to resolve problems.

Telkom Kenya scores nicely on the first ingredient, but fails miserably on the second and third ingredients. For example, whereas your issue may be resolved within two minutes via Safaricom’s social media customer care platforms, Telkom Kenya’s social media still has a platform that works from 8AM to 5PM only, and in most cases would refer you to another social media platform to have your issues listened to.

Secondly, whereas Safaricom has made sure that the customer care representatives have access to the tools necessary for resolving most of the issues that the customers may take to them, Telkom Kenya’s customer care still rely heavily on offline customer representatives based at Telkom Kenya shops – representatives that I have found to be thoroughly careless with their jobs. For Telkom to acquire that magic glue that sticks subscribers to their network, they must overhaul their customer care department and streamline it according to the standards already set by the market leader.

Telkom Kenya may have squandered the opportunity to take Safaricom head on, but it is not too late for them to rethink their model. What Telkom Kenya should know is that Kenyans are yearning for are the following:

  1. An affordable network that is reliable across the country
  2. A network that will offer truly unlimited Internet with no speed caps but at affordable monthly rates
  3. And reliable friendly prompt customer care services across all offline and online platforms

 

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Odipo Riaga
Managing Editor at KachTech Analytics Ltd



Odipo Riaga is a Technology Blogger interested in emerging tech such as VR and AR, AI, Life Extension, Exponential Biotech, Immortality, Cyborgs and many others.


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