23 January 2013

Kenya: Orange's Pre-Paid Numbers Drop As Rivals Gain

Telkom Kenya is the only mobile operator that has been losing subscribers according to latest Communication Commission of Kenya data.

The operator lost 28,472 subscribers between July and September last year even as its competitors signed in new ones. It lost over 29, 500 pre-paid customers and marginally gained just over 1000 new post-paid clients. By end of September it had 3.09 subscribers.

However, a majority of these subscribers were dormant. Telkom held a market share of 10.2 per cent, but only accounted for per cent of the voice traffic share in the market.

"Notably, the market share by traffic for Telkom Kenya (Orange) does not correlate to the market share by subscription. This suggests that majority of the subscribers are not active and, therefore, do not make calls," CCK said in a statement.

During the period under review, the other three mobile operators recorded positive gains in subscriptions with Essar Telecom with the highest gain of 344 000 new subscriptions. Safaricom gained 214,000 while Airtel gained about 200 000. Their voice traffic shares was also consistent with their market shares.

Telkom chief executive Mickael Ghossein defended the loss saying, "This can attributed to a combination of factors: industry compliance on the mobile phone switch off that occurred last year, market forces also came into play as well".

"Nonetheless, a review of tact is being implemented to counter this," he said. The decline in user numbers come as its main shareholders, France Telecom and Government of Kenya engage in a tussle over cash injections into the firm to pay bad loans and keep it in operation.

This has led to restructuring of the shareholding,where the government now has 40 per cent stake down from 49 per cent following failure to meet required capital injection agreements.

The fixed lines business, where Telkom dominates has also seen a 30.2 per cent declines in the last year. Orange has however been making positive gains in the data segment. It gained 2.2 per cent points in the mobile data share as Safaricom and Essar lost.

"Mobile data is fast growing; the results demonstrate therefore that our strategy is working. We are not pulling out of the

Voice bracket but continue to implement our strategy for the long term in anticipation of the growth of our numbers," Ghossein said.

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