In the last couple of years, the telecommunications sector in the country could almost be termed as a monopoly market owing to the fact that subscribers only had four telcos to choose from with three in this case struggling to catch up with the big fish. Then came YU’s downfall that saw the telco exit Kenya since they could no longer sustain services and customers due to financial difficulties.
Today, Safaricom has the biggest market share which stood at 67.9 percent earlier this year. Earlier this year, Airtel sued Safaricom with claims that the company has abused leading market position more so in the mobile money sector which has given it a big following considering the market share should be equal if the parties are offering same services and products therefore the rival company demanded the country’s competition authority to probe. This was just one of the many complains the rival telcos have aired over the years. Authorities however had nothing much to do to increase following for them in the case.
In the first quarter of 2014, Kenya’s telecoms regulator formally awarded three MVNO licenses to Finserve Africa a subsidiary of Equity bank Tangaza’s Mobile and Zioncell Kenya which was termed as a milestone in the Kenyan ICT industry to break market dominance. Equity’s subsidiary therefore put out its market strategy and roll out plan a month later which included the introduction of special SIM which raised temperatures in the sector since this meant stiff competition for Safaricom and other mobile operators.
The new SIM made a promising entry in the market since subscribers now don’t have to migrate from telco to telco for services but use the thin SIM simultaneously with the initial network SIM. This would also see more accessible, flexible convenient and more affordable banking services. Since the roll out, it has been months and months of court hearings due to complain that the SIM would increase fraud rates in the mobile money sector as well as other operations from SIM to SIM.
Recently the regulator gave a go-ahead on the service roll out which did not sit well with the telecommunications companies which still insist on insecurity exposure for subscribers. President Uhuru Kenyatta has however given a nod on the new service roll out which he says is moving to open up economic sectors to competition among local and foreign players which will be an end product of benefits to the consumers.
Speaking at the East Africa Business Summit, the president said he had resisted pressure to go slow on opening up Kenya’s aggressive mobile money market to competition. He put emphasis on the variety of services consumers will have to choose from and have worthy services for that matter which would mean huge benefits for the subscriber. This is the reason why the government decided not to delay Equity Bank’’s roll out of MVNO services despite major opposition from interested parties in the country.
The move is big step for the ICT industry in Kenya which has been the government’s main focus in automating services and operations for the people to create opportunities and also bring about advantages. He dismissed complains that have been presented to him by rival telecommunication companies and bodies saying it is time the country and more so the sector opened up to competition.
Addressing the main concern raised by Safaricom on the SIMs capacity to intercept and relay data to third parties, he encouraged trial which might result to mistakes that the country should learn from and use technology to drive development agenda.
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At the moment, the bank is piloting Equitel SIM card which I agree with my Colleague Washington Odipo is the solution to M-PESA’s inflated tariffs. He also squeezed in the importance of the local media houses; Nation Media Group, Standard Media and Royal Media Group to negotiate on modalities of the planned Digital switch over to see the country open up to full utilization of ICT for the best.
MVNOs have had it rough in climbing the operator ladder in the African continent thus far with some countries having the Virtual operators illegal. This is probably the next big thing Kachwanya.com will let you in on. However, Nigeria’s MVNOs have seen big fish in the country opt to outsource models in collaboration with third-party infrastructure providers rather than deploying and owning their entire network infrastructure themselves. The move is expected to enable MVNOs to focus more on their core business — providing improved customer experience through excellent network service.