Leading mobile network operator, Safaricom has cut down its data prices in what is regarded as a response to the increasing competition in the telecommunications sector in Kenya. Vodacom, Safaricom’s parent company, revealed that although these prices were slashed in several of its subsidiaries across Africa, Kenya’s unit made the highest cut.
Vodacom’s units in the Democratic Republic of Congo (DRC) lowered data charges by 29.2 percent, followed by Lesotho (28.9 percent), South Africa (23.3 percent) and Tanzania (13.8 percent). Meanwhile, the cut in Kenya is 42 percent. The telecom firm emphasized that this decision was arrived at due to regulatory and competitive pressure.
“In the context of our commitment to drive digital inclusion, and given the tough consumer environment, we recognise the imperative to further lower data prices in some of our markets,” Vodacom says in the report.
However, the company stated that it will ensure the massive cuts do not compromise its ability to make investments in network and Information Technology (IT) infrastructure needed to broaden service delivery and maintain high-quality offerings.
Vodacom might be facing intense competition in several states of operations, but the most significant is expressed in Safaricom, hence the high rate in data reduction. Other notable telecommunication operators posing a threat to Safaricom in Kenya include Airtel and Telkom Kenya.
A few months ago, these two competitors announced a merger with the intention of posing an even stronger challenge to Safaricom. The two companies intend to combine products, strategies and expertise in order to take over the Kenyan network space, a sector which Safaricom dominates at the moment.
Nonetheless, it will be difficult for the soon to be merged companies to take over the market. Kenya has about 46.6 million phone subscribers. A report by Tech in Africa shows that Safaricom alone has 30 million active subscribers.
Also, Safaricom’s mobile platform, M-PESA has recorded notable progress in boosting financial inclusion in Kenya’s economy. The population which increased to 83 percent from 75 percent has the telecom operator standing on solid grounds in Kenya’s economy. Hence, Telkom Kenya and Airtel Kenya need to strategize critically.
Safaricom also offers several ranges of data bundles including daily, weekly and monthly packages. By offering even lesser prices, it will only attract more subscribers. Considering the factors at play, it will take several years for Telkom or Airtel (or both combined) to overtake their giant competitor.