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Kenya Mobile-Phone Users Rise 9.5% as Costs Reduced

Feb. 3 (Bloomberg) -- Kenya’s mobile-phone users rose at the fastest pace in at least four quarters in the three months through September as tariffs in the East African nation fell, the Communications Commission of Kenya said.

The number of users increased 9.5 percent to 22 million in the third quarter of 2010, the Nairobi-based commission said on its website today. In the three months through June, user numbers increased 1 percent, and rose 2.6 percent and 8.4 percent in the two preceding quarters, according to data compiled by the commission.

Kenya’s telecommunications regulator in August ordered mobile-phone operators to halve the rates they charge each other to transmit calls across networks. That triggered a round of reductions in call costs by companies to as low as 2 shillings (less than 1 cent) per minute.

“Mobile tariffs reduced significantly over the quarter registering an average of 2.65 shillings ($0.03) for on-network calls per minute from 4.78 shillings per minute in the previous period,” the commission said.

During the quarter, Airtel Kenya Ltd., the domestic unit of Delhi-based Bharti Airtel Ltd., grew its market share to 13.5 percent, or 1.14 million users, from 9.1 percent in the previous three months. Telkom Kenya Ltd., a unit of France Telecom SA, expanded its market share to 4 percent, or 323,298 users, from 2.7 percent, the commission said.

Market Share

Safaricom Ltd., the biggest operator, had its market share drop to 75.9 percent from 80.7 percent even as it added 473,979 users. Essar Telecom Kenya Ltd., a subsidiary of Essar Group, lost 26,266 customers as its market share slipped to 6.7 percent from 7.4 percent, the commission said.

The number of fixed lines declined 2.6 percent to 228,391, it said.

Kenya is estimated to have 8.69 million Internet users compared with 7.8 million in the previous quarter. Broadband subscriptions increased to 84,726, representing 0.97 percent of the total internet subscriptions in the country, from 18,626 in the previous quarter, the regulator said. Mobile Internet subscriptions accounted for 99 percent of users in the period.

“Mobile shall continue to dominate the provision of Internet service as competition in the voice market intensifies, compelling operators to diversify into other products and services in order to sustain and grow revenue,” the regulator said.

Safricom, 40 percent-owned by Vodafone Plc, the world’s biggest mobile-phone operator, had a 92.18 percent share of mobile Internet user market, or 2.98 million subscribers, followed by Airtel at 4.6 percent.

To contact the reporter on this story: Eric Ombok in Nairobi at eombok@bloomberg.net.

To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net

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