Disruption looms in Kenyan telecoms

posted Sep 4, 2014, 2:12 AM by Peter Movotek
April 11, 2014, 10:50 a.m.
Image: By BiztechAfrica
Disruption looms in Kenyan telecoms

By Semaj Itosno, Nairobi, Kenya

With the entry of three more companies in Kenya’s mobile sector, telecoms competition is expected to be stepped up a notch.

The Communications Commission of Kenya has awarded a Mobile Virtual Network Operator permit to Equity Bank, through Finserve Africa Limited, Tangaza Mobile Pay Limited and Zioncell Kenya Limited.

Equity Bank had applied under its subsidiary Finserve Africa. Zioncell Ltd is an affiliate of Mobile Decisioning and Mobile Pay Ltd owns mobile money transfer platform Tangaza Pesa

“We are marking yet another milestone in the ICT industry through the issuance of Mobile Virtual Network Operator Licence,” said CCK director general Francis Wangusi in a statement.

This means the new entrants would introduce mobile payment services using own SIM cards, thus eating into the market currently dominated by Safaricom’s M-Pesa.

The three companies are expected to launch their services riding on Airtel Kenya network. This means the trio will not invest in the underlying infrastructure and analysts believe Airtel will be the ultimate beneficiary and yuMobile never reinvented itself.

With the news of yuMobile and Orange looming exit former Kenya Ministry of Information Permanent Secretary Dr Bitange Ndemo, urged CCK to act fast to avert possibility of creating monopoly in the sector.

 “The regulator must intervene quickly otherwise if there is no competition, the consumer will suffer.  The remaining players must invest in data to be relevant in the market.  Yu never moved from 2G and mostly relied on voice revenue.  Voice is not growing and that is where their problems started,” Dr Ndemo said in an earlier interview.

This comes at a time when telecommunication is undergoing key changes with the looming exit of YuMobile and Orange.

CCK has already approved the sale of Essar-owned yuMobile to Safaricom and Airtel.

Orange, which owns 70 per cent of Telkom Kenya, is reviewing its investment due to diminished chances of making profit.

Equity Bank, Zioncell Ltd and Mobile Pay Ltd had all submitted applications to the CCK to be granted Mobile Virtual Network Operator (MVNO) licenses.

Comments