By the end of this year, Safaricom, Airtel, Essar (Yu Mobile) and Telkom Kenya (Orange) will have collectively spent KES 20 billion (USD 238.2 million) to expand their data services. According to GSMA (Groupe Speciale Mobile), Kenya’s four telecommunication companies aim to improve their internet services as they compete for the widest reach and the largest share within the data market.
However, the internet is useless unless you have something to access it with. There are a wide variety of devices that can be used to access data services and a study by Deloitte argues that the PC is Kenya’s leading piece of technology. But with Smartphones, Laptops and Tablets taking the market by storm, will these seemingly archaic devices cease to exist?
Modems, Routers, Fibre-optic Cables and Wireless Frequencies (Wifi) may be the channel through which anyone can access the internet, but what really takes the cake is the quality of service delivered. People are looking for speed and pocket-friendly prices. A laptop may be bigger than most tablets but, in this particular case, size only matters if you're willing to sacrifice portability. In which case, a Smartphone is the easiest device to carry.
But size is not the only thing that customers are looking for. When it comes to data services, there are other factors that decide whether or not a network deserves to hold the proverbial crown.
Internet Speed and Quality
A 2G (short for "Second Generation") network is basically the bare minimum that service providers have to offer (1st Generation devices were first used in the 80s and may be obsolete in the years to come). 3G Internet connectivity is somewhat faster and offers better quality for data users. The latter is available on all Android, Apple and Windows mobile devices.
While Safaricom takes the lead in mobile service subscription, 4G data services may be their Achilles’ heel. Like the legendary Trojan warrior, Safaricom may soon see that power does not necessarily give rise to victory. They may be the network with the largest number of subscribers but some may argue that their clients are less than satisfied. The firm even admits that one of their previous losses was caused by network price wars.
Their internet bundles no longer have an unlimited package so subscribers are forced to cope with caps on the number of things they can do when they are online. Downloading a 2 Gigabyte file with a Safaricom bundle of One Gigabyte is impossible.
On the other hand, Telkom Orange gives daily unlimited bundles for as little KES 50 per day. For an entire week, Orange subscribers can pay KES 990 and download as many files as their devices can carry.
Bundles aside, there are data-enabled devices that may decide the fate of the next localized internet war.
Deloitte’s study reveals that, in East Africa alone, there will be an increase in the use of newer mobile devices to connect to the Internet. Tablets, Smartphones, Notebooks and any other Wifi or data-enabled technologies are quickly becoming more affordable as the days go by. A Tablet which used to retail at KES 64,000 can now be purchased for as little as KES 25,000 now.
What’s more, Kenya’s leading service provider (in terms of market share) told Pesatalk that, in 2013, they plan to introduce Smartphones that are 20% cheaper than those that are currently available in the market.
“As a business, we consider broadband to be one of our next frontiers for growth and have therefore invested in the underlying 3G, fibre and Wimax networks,” said Safaricom Chief Executive, Bob Collymore.
Speaking with Pesatalk during a previous exchange, Collymore said that the new Smartphone models would not completely replace the current phones. He said that they would, instead, supplement the existing stock. “Our 3G network is currently underutilized,” he said, noting that only 10% of the market was actually using the 3G network.
He said that Safaricom is currently working on boosting its network speeds. The company also plans to set up a fibre network which it hopes will be the best of its kind in the country. The 5-year program is aimed at augmenting the existing fibre network that Safaricom leases from other providers.
The firm has since made contracts with Huawei, a company that has supplied the brand with rights to some of their data-enabled devices, the likes of which include Android phones and Tablets. They also have some Samsung, Alcatel and Sony Ericsson phones locked to their network.
[caption id="attachment_28801" align="alignright" width="300"] Android phones[/caption]
Other service providers like Orange have contract deals with ZTE, Sony Ericsson and Samsung, including Huawei. Their internet is currently running on a 3.75G platform, possibly the best service available (based on quality).
While Smartphones are relatively cheaper than computers, the PC may be the number one weapon of choice when it comes to data services. Deloitte predicts that more than 70% of time spent on computer devices will be done using PCs in 2013.
Nonetheless, Smartphones and tablets have sold over 1 billion units worldwide in the past year, up from 350 million units in 2010. Meanwhile worldwide PC sales grew to 355 million units in sales in 2012 up from 350 million in 2010.
Deloitte believes that PC sales have held steady and will continue to grow in 2013, albeit at a slower pace than they did in the past 2 decades. The firm believes that 1.6 billion PCs will be used worldwide in 2013, up from 1.4 billion in 2010.
Kenya is the fourth most active country in Africa in terms of internet use. With new data-enabled platforms being sold and released as fast as is feasibly possible, who knows what device will reign supreme?
Abacus is the result of over 10 years market experience and is licensed as a data vendor by the Nairobi Securities Exchange
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