13 Nov

African Economic Growth Rides on Wireless Rails

A telecommunications boom is lifting an industry and a continent.

In Kenya, hundreds of thousands of people are rising out of poverty as mobile-money services turn subsistence farmers into business people. A similar dynamic drives Ethiopia, the fastest-growing economy in Africa, where the gross domestic product is forecast to climb 8 percent in 2019. Borrowing costs in Ghana plummeted almost 2.5 percentage points during the past 12 months amid an unprecedented gain in GDP that’s been led by the growth of the telecom industry.

From the Atlantic to the Indian Ocean, hand-held phones are letting people become their own ATMs, increasing economic activity by enabling payments for food, travel, school and business. Wireless communication is driving economic growth in sub-Saharan Africa much as the railroad did in the 19th-century U.S., accounting for almost a tenth of global mobile subscribers and a growth rate that’s beating the world.

The transformation is reflected in the more than 1,300 publicly-traded companies that make up corporate Africa. The value of communications firms increased during the past five years to 25 percent of the total market capitalization of African companies, up from 16 percent, according to data compiled by Bloomberg. Materials and energy, the natural-resources benchmarks that defined the region since its colonial days, diminished to a combined 18 percent from 27 percent during the same period.

Read more here: African Economic Growth Rides on Wireless Rails

02 Oct

Kenya: Safaricom’s share of calls market hits 5-year high

Kenya. Safaricom’s share of the voice calls market rose to a five-year high in the year ended June 2017, underscoring the company’s continued dominance of Kenya’s telecommunication market.

Newly-released data from the Communications Authority of Kenya (CA) shows that Safaricom had 80.4 per cent share of voice traffic, up from 75.7 per cent the previous year.
Safaricom’s dominance of the voice market last rose past 80 per cent in the year ended June 2012.

Kenya’s two other telecoms operators, Telkom Kenya and Airtel, saw their share of voice traffic shrink, signalling the challenge they face fighting for space in a market dominated by the Safaricom behemoth.

Telkom Kenya’s market share fell from 8.6 per cent in 2015/16 to 6.3 per cent in 2016/17 while Airtel’s market share fell from 15.4 per cent to 12.9 per cent, according the latest industry report.

The CA attributes the changes to pricing decisions made by the two smaller operators.
Upward reviews made to voice and data tariffs have seen customers either flee from the smaller operators or choose not to use those networks when making calls, the CA report says.

The report paints a rather darkly picture for competitiveness of Kenya’s telecommunication sector, pointing ever more to the question of the smaller operators’ ability to survive in the current market structure.

Of the three mobile network operators, Safaricom remains the only profitable company. Airtel Kenya’s most recent financial results show that the company is operating deep in the red with current liabilities that far outweigh its assets. The trends in mobile voice traffic are also reflective of the overall picture in the telecommunications sector.

The CA report shows that there were 40.2 million mobile subscribers in Kenya at the end of June 2017.

The data shows that over the past five years, Safaricom’s customer numbers, buoyed by the company’s market share, rose to over 70 per cent for the first time in the year ended June 2017 since 2010.

Read more: Safaricom’s share of calls market hits 5-year high