The change in shareholding structure of Kenya’s third largest telecommunications company-Telkom Kenya- has impacted mobile money and the mobile subscriptions in the second quarter of the 2023/24 Financial year.
The number of mobile subscriptions dropped from 67.1 million reported last quarter to 66.7 million. As a consequence, mobile money subscriptions dropped to 38.0 million.
“There was a decline in mobile subscriptions which is attributed to high churn vis-à-vis acquisitions and especially with regard to Telkom Kenya Limited,” the Communications Authority noted in its Q2/23 sector statistics report.
Safaricom at 44,013,156 leads in mobile subscription followed by Airtel (19,387,460), Telkom Kenya (1,343,276), Equitel (1,503,749) and JTL (498,068). Machine-to-Machine subscriptions nominally dropped to 1.515 million from 1.523 million recorded in the preceding quarter.
Safaricom’s M-pesa controls 97.1 per cent of the mobile money market share, Airtel 2.9 per cent and T-Cash comes third at 0.0 per cent.
The Telkom Sale
In 2022, the government agreed to buy 60 per cent shareholding in Telkom Kenya from Jamhuri Holdings Limited (Jamhuri/Helios), following the decision by Jamhuri/Helios to exit the struggling telco.
However, the government made a decision to amend the transaction to have another private investor to acquire Jamhuri/Helios’ majority stake. A competitive process to identify the new investor begun in January 2023, resulting in an evaluation process that recommended the Infrastructure Corporation of Africa LLC (ICA) of the United Arab Emirates to be the new majority shareholder in Telkom, based on the offer they put forward.
According to Treasury Cabinet Secretary Njuguna Ndungu, the offer by ICA includes capital injection to fund Telkom Kenya’s critical infrastructure and the overall upgrade of the company’s capabilities, and also settle some of the outstanding liabilities of the company.
Internet and Calls
During the quarter under review, 4G technology gained popularity among consumers of mobile data services, contributing up to 51.5 percent of total mobile data subscriptions. In addition, mobile data volumes consumed within the 4G network accounted for 82.7 percent of total data volumes. 4G mobile network coverage in the country is currently at 97 percent with 2G and 3G leading at 98 percent.
The volume of local mobile calls increased by 6.1 percent to 23.6 billion minutes up from 22.2 billion minutes reported in the previous quarter. The significant increase is attributed to the long school holiday coupled with the festive season which had subscribers communicating for longer periods of time. On the other hand, mobile-to-fixed voice traffic dropped by 2.0 percent, to record 14.7 million minutes.
“The Minutes of Use (MoU) per Month per Subscription grew to 117.8 minutes from 110.3 minutes posted in the previous quarter. On the same trend, short messages sent (SMS) per month per subscription increased to 70.4 messages during the period under review,” the CAK said.
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