Mobile service rivalry awakened by new players MVNOs

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  • 4 years ago
  • Posted: September 8, 2014 at 12:44 pm

Kenya’s telecom industry history seems to be repeating itself only that products change by the years. Three years ago, the sector was characterized by mobile tariff wars that immediately simmered after some of the operators reduced call rates to bare minimum to offer free calls.

From calls, the attention then shifted to text messages and internet data services to increase on profitability. Telecommunication companies went back to the drawing board and came up with packages that would cater for both then released them to the market. Subscribers were spoilt for choice.

However, due to high smart phone penetration (now reported at 67 percent) mobile applications such as Whatsapp, Viber, Telegram and social media platforms such as Facebook and Twitter the SMS service was too threatened.

Today, the game tact has changed product. Forget the text messages and call rates. Mobile money service is the new kid on the block. Operators are on the scramble once more, fetching as much subscribers as they can with low charges for transaction.

Safaricom currently leading in terms of subscriber base has for the longest time shared the throne with no other operator in the country which has left subscribers with no choice but settle with high rates and stringent conditions from the company making rival operators confirmed losers. Call them sharp, aggressive or both, rival telcos have let subscribers down in terms of services they offer or rather how they present them to the market.

How do you explain a 60 percent difference in subscriber base? Before going to court in pursuit of ‘fairness’, the telcos should first take their services and offers a notch higher to woo subscribers as well as identify the problem with their strategy.

Subscriber base has proven to increase if the company is offering reasonable mobile money transaction rates.  Mobile money transfer has become the most successful innovation in the sector with institution like banks feeling the heat and finally integrating it in their customer service.

Mobile virtual Network Operators (MVNOs) the new players in the market seem to know exactly what the market needs. Change and flexibility not to forget ease in mobile money transfer. This has awakened new competition wars in the industry making it a new dawn for the industry.

So far three MVNOs licences Tangaza’s Mobile Pay Limited Zioncell Kenya Limited and one to Finserve Africa Limited, a subsidiary of Equity bank, have been issued.

Equity Bank’s MVNO has been on the spotlight for a while now following its intended roll out of mobile services that comes with great deals for today’s subscriber. The network operator comes in handy with new technology a first in the Kenyan telecommunication industry and lowered calls and money transfer rates.

The industry’s big fish have raised objection on the roll out claiming to have mobile money services compromised saying the service will cause rise in fraud cases. Currently, the Communication Authority is researching on the same and the results will determine whether the technology is fit for the consumer hence its release. This is just a derailment for Equity which they definitely should have expected from the market which almost seemed monogamous.

READ:  Any reason for telecommunication’s big fish to get scared ahead of Equity’s MVNOs?

Safaricom’s word against equity’s

Mobile operator Safaricom has termed Equity’s release on mobile services controversial claiming this will alter services by primary SIM cards since the special cards are designed to marry the initial card hence work simultaneously.

Equity has again and again assured secure transactions and services for subscribers with the new technology since it has been practiced in other regions with success but Safaricom will take none of that. Even after writing to communication regulator CA to stop the service from rolling out, the telco has gone ahead and presented its case to parliament in bid to win the MPs support.

Safaricom called for an independent test of the thin-SIM technology to ensure effectiveness and convenience for subscribers. Equity’s CEO went ahead to defend the technology by saying the SIM card will never go live at the same time the primary SIM card thereby posing no risk of intercepting PINS or information.

The telecommunications company confirmed to have tested the technology by putting the special SIM in its lab and tested to see how it affects communication between the phone and the original SIM. The results showed that the thin-SIM as a bridge between what the subscriber types in their phone and the main SIM. Using the technology, the SIM is able to see through any transaction.

Further investigations are however underway to verify its effectiveness and security for the mobile user.

Why the thin-SIM is insecure

Earlier on, London based global association of mobile operators (GSMA) said the special SIM cards could only pose security risks when they are of poor quality therefore suggested an independent audit be carried out to ascertain quality of those that Equity intends to roll out.

GSMA said maliciously designed SIMs are capable of bypassing any security technologies to the extent of retrieving personal data. The card can access the primary SIM, change configuration settings and execution of actions without the explicit permission or knowledge of user.

Before the activation of the thin-SIM, Equity will have to ensure users of convenience and security of using the technology to avoid sharing information with third parties without knowledge as well as vulnerability to fraud.

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Winfred Kuria
Winfred Kuria is a self-constituted web content writer in charge of Tech News and Events Publicity at Kachwanya.com. She will communicate in the simplest way possible with an aim of changing the world one mind at a time.
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