Tuesday, December 18, 2007

Kenya: Country 'Can't Host Four Mobile Phone Firms

image During the last eight years, wireless communication has been considered the fastest growing segment of telecommunications.

Despite the rapid growth experts now reckon that the country's economy is unable to support more than three operators.

Celtel Kenya CEO, Mr David Murray, says the Government can license as many GSM operators as they can, "but the economic reality is that if you look around the world, countries bigger and wealthier than Kenya cannot support four operators."

Apart from Celtel Kenya and Safaricom, Econet Wireless and France Telecoms, who have just acquired the controlling stake in Telkom Kenya, are all expected to rollout mobile phone operations in the country.

Murray says mobile phone operation is a capital intense business and unless the country can amortise her costs against its revenue streams it will not be viable.

"It is highly questionable, if you look at the experience in South East Asia, Malaysia, Hong Kong. When I was in Malaysia they had seven operators, today they have three, because its the economics that determine the survival," says Murray.

Kenya with a population of 34 million has much lower average revenue per user (ARPU) than countries in the West. The ARPU in the country is below $10 per month.

"Look at France with about 60 million people; they three mobile phone companies; United Kingdom with a population of 60 million has four operators, Spain has three; Italy has three also and the third one is not doing very well," says Murray.

However, Murray reckons that survival will be determined by creativity on the marketing front, product development and network reliability.

This one of the reason why the parent company, Celtel International has been on the forefront in harmonising their networks across the continent.

One Network is the first-ever borderless mobile network in the world. This allows customers to move freely across geographic borders without roaming call surcharges and without having to pay to receive incoming calls.

The One Network service is automatically activated upon crossing the geographic border into another of the three countries, with no prior registration required or sign-up fee charged.

"From three countries (Kenya, Uganda and Tanzania) to six and now 12 countries in Africa," said Murray.

The service now covers Burkina Faso, Chad, Malawi, Niger, Nigeria and Sudan. The others are the Republic of Congo, the Democratic Republic of Congo, and Gabon.

The service is now available in all Celtel operations in Africa except in Zambia, Sierra Leone and newly acquired Ghana operation.

"The extension of this technological break-through now offers the possibility for nearly half of Africa's population to make calls at local rates across 12 countries throughout the continent," said Murray.

Innovation at its best

It means the world's first borderless mobile phone network covers an area more than twice the size of the European Union.

One Network truly showcases African innovation at its best and confirms Celtel as the fastest growing brand in the fastest-growing mobile telephone market in the world. In a region historically dependent on freedom of movement across borders, we are now offering a communications solution that fits the needs of our customers, breaking down barriers and making life better for businesses, families and individuals.

The inclusion of Sudan is strategic and will boost traffic across the border. "We are going to get a lot of United Nations traffic to and from Sudan and obviously the advantage of One Network is that it's a lot more economical than traditional roaming," says Murray.

"With roaming, you pay when you receive a call, but with One Network, there is no such paying, and with prepaid customers you can buy local scratch card and top-up whenever you are," he adds.

What about closing the gap with competition? "We have been growing significantly in the corporate sector with solutions offered by the blackberry. The corporate segment also uses a dedicated server (as opposed to working over the Internet or room server) which turns to be faster and more reliable and high quality of the data network."

"In terms of production development, we launched the blackberry in June, the competition launched the same in August, you get a small window of opportunity, that makes competition fun," he says

allAfrica.com: Kenya: Country 'Can't Host Four Mobile Phone Firms (Page 1 of 1)