Telkom Kenya records biggest drop in fixed Internet market share

Corporate News

Telkom staff displays an Internet modem. PHOTO | FILE 

By OKUTTAH MARK

In Summary

• Telkom is Kenya’s sole provider of fixed telephone services that has heavily invested in three undersea fibre optic cables, TEAMs, Eassy and LION.

Telkom Kenya has lost 9.8 percentage points of its market share in fixed Internet, the latest data from the industry regulator indicates, in a period that saw Wananchi Group and Safaricom tighten their grip on fixed and mobile data business.

The Communications Authority of Kenya (CA) report for the year ended June 2015 shows that Telkom Kenya’s share of the fixed Internet market dropped to 1.8 per cent from the previous 11.6 per cent for the year ended June 2014, while its subscribers now stand at 2,152 as at June from the previous 11,714, meaning it lost 9,562 customers in one year.

Over the same period Wananchi Group, the owners of Zuku brand, increased its market share on fixed Internet to 53.6 per cent after adding 19,288 subscribers over the year to raise its total customers to 63,542, widening the gap between it and Liquid Telecoms which controls 16.5 per cent of the market with 19,535 subscribers.

Telkom moved from third position to sixth position having been overtaken by Safaricom which has 9.2 per cent market share (10,965 subscribers), AccessKenya that has 7.1 per cent (8,445 subscribers) and Jamii Telecoms with 6.6 per cent with 7,846 customers.

“The market shares for other fixed/wireless data/Internet subscriptions for the top 10 operators in the market experienced mixed trends during the period under review with some operators gaining and others losing,” reads part of the CA sector statistic report.

The report also said the subscriptions of fixed Internet increased significantly to 118,554 compared to the same period in the previous year that recorded 99,342 subscriptions.

The loss of such a large number of customers by Telkom Kenya means that the operator has failed to capture the data market where it has a clear competitive advantage over its rivals.

Telkom is Kenya’s sole provider of fixed telephone services that has heavily invested in three undersea fibre optic cables, TEAMs, Eassy and LION.

Besides, Telkom owns the largest terrestrial fibre optic network that runs from the port city of Mombasa to Malaba on the Kenya-Uganda border.
The company also manages government-owned National Optic Fiber Backhaul Infrastructure (NOFBI) for a fee.

The NOFBI is the backbone of Kenya’s Internet network that links counties and is used by other operators such as Safaricom, Jamii Telecom and AccessKenya to transmit voice or data traffic.

This elaborate infrastructure has, however, not translated to market share advantage for Telkom which still trails its competitors in the retail data market.