Kenya | Airtel vs. Safaricom


Shortly after returning to Safaricom, Bob Collymore, returning to work after a nine-month medical leave in August 2018, he got back in the trenches. In the last forty years, there are several sections in the China telecommunications sector across users, often finishing in rod costs. Airtel Kenya uses all the tools he can get out of being under his rival competitors; These are coming from a & # 39; Net cost cuts to seek government interventions to reach the game area to a certain extent.

"We're seeing a new price war," Collymore told a news conference in Nairobi. Previous days, Airtel Kenya, Safaricom's main rival, Bharti Airtel subsidiary, India, had set down vocation rates. Airtel wants to trade for a market share.

So far, Collymore has stated that Safaricom is not willing to take part in a price competition and accept his / her. a large proportion of his market in Airtel, who has been a building support over the past two years. The Airtel strategy will confirm the patience of shareholders of its Indian parent company, as the lower loss targets will be & # 39; reducing revenue. Airtel has been fighting for India's price war, and expects a list of about 25% of his African jobs on London Stock Exchange in 2019 to help him deal with his debts .

M-Possible impact

China's moving currency telecommunications and mobile markets are still growing, especially with the number of mobile loans (see TAR103, September 2018). Between April 2017 and March 2018, the KSh3.5trn ($ 34.6bn) shift cash market moved together, raising KSh219bn from the previous year. The M-Pesa Safaricom platform was home to more than three-quarters of the total amount made.

In April 2018, Njuguna Ndung's national bank regulator told the Daily Business that M-Pesa "has created a vibrant economy". Although the M-Pesa trip started the year before its post, B & # 39; He was a family name during his time.

Safaricom and Airtel are fighting for the dynamic taxonomy market in Kenya, with several groups such as Kencell, Celtel and Zain throughout its history. Although there are a number of smaller players, such as Telkom Kenya and Liquid Telecom, most of the competition between these two players, is Safaricom the giant and Airtel the upstart.

Increase 66% in taxes on mobile currency introduced in the budget in September, from 12% to 20%Since 2018, Safaricom controlled 90% of the revenue in the traditional telcom markets on voice voices and text messaging. He has 29.5 million supporters: at least 20 million more than Airtel Kenya. In a country with a popular population of 51 million people, Safaricom lives in over half of the citizens of the country. But most users have a & # 39; get more than one SIM charter, as one telephone user explained during lunchtime in mid-October: "Both of them and so when a person discounts prices, I & Use the same, and then change when they cost them. "

Airtel Kenya's efforts to try to innovate in Kenya have not been successful. For example, it launched Airtel Kilimo in 2013 with the hope that it will add up to 200,000 customers by mid-2014 for a service that provides weather, advice and market prices. Just over 20,000 had subscribed by December 2014, according to a review by the GSM Association.

Promotional telecommunications engineer Das Sarma has been running Airtel Kenya since February 2017. He has been in & # 39; look at the success of Airtel Bangladesh's growth in consumer numbers.

In its eight years of work, Airtel Kenya has never made a profit, despite the growth of telecommunications and mobile money markets. A company has tried to grow through a cat. He bought the Kenya yuMobile and Kenya subsidiary of 2.5 million sub-headquarters in 2014, as long as Safaricom was a member. buying yuMobile's Kenya infrastructure. In early 2018, Airtel Kenya's activists were in talks to get Telkom Kenya, which has a subsidiary base of about four million, but these discussions fell.

Airtel Africa, the continental partnership in which Airtel Kenya is working, has just begun to deliver positive statements recently, with its profits for its first season of 2018 and, triple to $ 154.2m from $ 57.5m in the last quarter of 2017. Airtel Africa was thinking about going to # 39; He sold some of his assets after a long time to not return positively, but regulation has now been rejected.

Threats left

Airtel Kenya has reduced more market share (see table) because the unit will kill the mother's vessel. She has changed several modified strategies and senior executives several times. In 2015, his current director, Adil El Youssefi, threatened that his a company that would destroy Kenya if the government did not; Getting involved and problem solving Safaricom's laird problem market. "We've been trying for more than five years," El Youseffi told him. Business today, "We have exceeded the KSh50bn ($ 495m) and we do not even carry out a single one in a profit." ElYoussefi left to another end of Safaricom competitors, Liquid Telecom, but the one who followed him in Airtel Kenya was the only fight.REVENUE SAFARICOM

In February 2017, the Kenyan Communications Authority discussed a report issued by the consultants at Analysys Mason about a telecommunications department competition. The report recommended that Safaricom should be divided into two companies: a telecoms company and a moving company.

M-Pesa's rapid growth has been a Safaricom ticket to success (see graph). The mobile currency platform has just given a telecommunications firm in the new ecosystem that connects telecommunications and financial industry. Providing a very urgent service – rent to & # 39; moving, pays and now deeper banking services – it has made Safaricom more convenient, in a marketing jargon.

But the Analysys Mason report says that if the current mobile currency players in Kenya can not interact, Safaricom's current situation is stronger and unfit for other players. Earlier this year, a high-level interactive system that launched M-Pesa and Airtel Money, Airtel Kenya's mobile cash service, was launched in an effort to solve the problem. There is still a question on how the government can get involved without going to # 39; damages Safaricom income no major part of the economy.

Referees do not listen

In mid-2018, Airtel Kenya and Telkom Kenya put up an unified agreement before the national gathering, which invited senior telecom companies to appear before the information and communications technology (ICT) committee.

During the spectators, the chairman of ICT Committee William Kipsang, chief executive Airtel Kenya, Prasanta Das Sarma, and operators from other companies took over. "Why would you want a parliament to punish success when one player is doing better than the rest of the telecommunications organizations?" He asked.

In a document sent by Airtel Kenya into the national collection, ask her; The company said that the government would take action on the recommendations of the Analysys Mason report. He also said that the government is saying that Safaricom is the biggest or needs to be fully implemented by mobile cash transactions.

The challenge has been a struggle up, partly because Safaricom is part of the government company and the other five players with foreign companies. Safaricom is currently owned by the government of Kenya and Vodacom from South Africa, with a quarter of the company with its public. The laissez-faire approach to governance has enabled Safaricom to become the most prestigious company in the East African and Middle East regions and the competitors have been struggling always.

Prodigies, prices and market shareSafaricom has also been more stable than its competitors, with only two senior executives in its 18-year history. Collymore's long-term travel has been weakened by a long time of continuous growth. He should return the brand to revive.

The question will at least Airtel make money to end Kenya's problem, because the East African country is going into a bad resource and changes that may in the economy and politics. It is likely that the Nairobi government will not publish one of the best assets and a huge amount of revenue.

The Safaricom logo has been part of the state of Kenya, especially under the tenancy of President Uhuru Kenyatta. In 2017, for example, it was reported that the Safaricom KSh7.5bn investment deposit paid for tight cameras and television networks closed in Nairobi and Mombasa. The system runs on the 4G + spectrum, which was & # 39; The work of Safaricom alone in 2015 was an incentive to threaten the leader of Airtel Kenya that an Indian company would leave Kenya.

But Airtel Kenya could still seek other ways to achieve the same outcome, such as the use of the courts to act against laws against trust. After eight years without advanced results, it is also possible that Bharti Airtel can choose to eliminate Kenya, and possibly other African markets where he has been spending money.

For the entire sector, lower prices tend to damage a profit margins as consumers become more valuable, with more taxes on mobile, data and timetables. In September, President of the Uhuru Kenyatta Presidential Fees transferred a transaction from 12% to 20%, and timely taxation increased from 10% to 15%. In budget recommendation, the secretary of his & # 39; financial secretary, Henry Rotich said that the larger income would be used to fund a universal healthcare budget.

Although the two main telecos live their lives, it can last, the long fight for its market share; emerge at a time of economic uncertainty. They are unlikely to stop and make peace for peace, although the government may have been activated to completely implement the interactive system in & # 39; trying to reduce conflict. But, having been involved in a passionate war, the companies are likely to innovate opportunities. Moving money that has been launched over 10 years ago – will the problem occur in Kenya or elsewhere?

Prasanta Das SarmaBob Collymore

The article first appeared in tweed November 2018 of the magazine in Africa

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