Saturday, April 4, 2015 Airtel traffic down despite buy-out of 2.7 million yuMobile subscribers

Airtel Kenya CEO Adil El Youssefi explains the firm’s latest promotion, UnlimiNet bundles, to Asha Wairimu (centre) and Amina Rabah. Last year, Essar Group sold yuMobile, its telco business in Kenya, for about Sh11 billion to Safaricom and Airtel Kenya. PHOTO | DIANA NGILA |   NATION MEDIA GROUP

In Summary

• Both Safaricom and Orange recorded increases in voice and SMS usage
• The population with access to the internet grew significantly to stand at 64.3 per 100 inhabitants

By EDWIN OKOTH
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Airtel’s acquisition of yuMobile’s 2.7 million subscribers last year has done little to support its business with the latest data from the Communication Authority showing a significant fall in talk time and short messages.

Last year, Airtel acquired yuMobile customers, boosting its subscriber numbers up 40.9 per cent to 7.6 million and, by extension, pushing the telco’s market share from 16.5 per cent up to 22.6 per cent.

But this has not translated to increased traffic in calls and SMS for the second largest mobile operator in Kenya.

“To the contrary, Airtel’s traffic declined substantially to 722 million minutes, down from 1.0 billion minutes recorded during the previous quarter. Its market share in voice traffic declined to 9.8 per cent, down from the 13.4 per cent reported during the previous period,’’ the Communication Authority’s quarterly statistics released last week highlight.

Airtel Kenya’s corporate affairs director Dick Omondi said the statistics do not reflect the true picture of yuMobile customer input since the quarter reported was before the acquired subscribers were fully absorbed.

“We had only brought them in 10 days before the quarter highlighted in the report ended. The acquisition’s real value will be seen in the quarter just ended. Migrating subscribers was not a short process either, but we are optimistic for better numbers, just as you have seen the rise in market share,” Mr Omondi said in a telephone interview.

Even without the input of the new subscribers, Airtel experienced a reduction of more than 280 million minutes in a year when the main competitors recorded increases in both voice and SMS traffic.

Safaricom’s traffic increased  to 6.2 billion minutes, up from 6.0 billion minutes, while Orange recorded a gain of 102 million minutes in mobile voice traffic to post 458 million minutes during the quarter.

The figures raise questions whether the telco gained any value from the much-praised acquisition of yuMobile last year. The 2.7 million subscribers seem to have done very little to add voice traffic. and SMS numbers also declined for the telco, while those of its counterparts recorded a rise.

“The  number of SMS sent from Safaricom network increased to 7.0 billion, up from 6.5 billion messages sent during the previous quarter. Airtel’s SMS traffic volume declined by a sizeable margin from 385 million messages sent during the last quarter to 188 million messages during the quarter under review.

The SMS share also reduced to 2.6 per cent down from 5.5 per cent share posted during the last quarter, ‘’ says the CA report released on Saturday.

TELKOM VOLUMES UP

Telkom (Orange), also recorded an increase in SMS volumes, with 72 million messages sent, up from 40 million messages posted during the last quarter.

The  nearly two-fold increase in SMS numbers is attributed to a promotion by the operator that enabled users to earn a bonus recharge of one shilling for every SMS sent. Last year, Essar Group sold its telecom business in Kenya — yuMobile — for $120 million (about Sh11 billion) to Safaricom and Airtel Kenya.

The report also says mobile money transfer subscriptions dropped by 5.3 per cent, to post 26.0 million subscriptions — down from 26.9 million subscriptions in the previous quarter.

The number of money transfer agents however increased by 4.6 per cent to reach 121,924, up from 114,988 agents posted in the last quarter. The estimated number of internet users during the quarter increased to 26.1 million, up from 23.2 million subscriptions reported last quarter.

The population with access to the internet grew significantly to stand at 64.3 per 100 inhabitants, up from last quarter’s figure of 57.1 per 100 inhabitants. Mobile penetration increased by 2.1 percentage points and stood at 82.6 per cent, up from 80.5 per cent recorded in the previous quarter.