New jobs in telcos sector increase by 23.8pc

A lady using a mobile phone. FILE PHOTO | NMG 

By JOHN MUTUA
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Summary

• Telecommunication firms, including Safaricom, Airtel and Telkom Kenya, added 1,673 new jobs to their payroll in the year to June, reflecting a 23.8 percent jump.
• CA linked the increase in new jobs to growth and new investments in the sector that saw five firms pump Sh57.5 billion into expanding their businesses including network upgrades, up from Sh41.8 billion.

New jobs in the mobile telecommunications sector increased at the fastest rate in five years, a rare bright spot in a corporate Kenya that has been shedding jobs and freezing new hirings.

Data from the Communications Authority of Kenya (CA) shows that telecommunication firms, including Safaricom

, Airtel and Telkom Kenya, added 1,673 new jobs to their payroll in the year to June, reflecting a 23.8 percent jump.

The regulator linked the increase in new jobs to growth and new investments in the sector that saw five firms pump Sh57.5 billion into expanding their businesses including network upgrades, up from Sh41.8 billion.

The five firms registered as mobile telecommunication firms, including Mobile Pay and Equity Bank’s

Finserve Ltd, registered combined revenues of Sh270.5 billion in the year to June, up from Sh247.3 billion.

Top companies have in recent months have had to put on hold the hiring of new staff in an economy that has also witnessed a string of job losses affecting nearly all sectors. Many companies have also recorded a drop in profitability as signalled by the record number of firms listed on the Nairobi Securities Exchange (NSE) that have so far issued profit warnings. However, mobile telecommunication companies have defied the trend.

“The number of employees in the mobile sub-sector has grown from 7,016 recorded in June 2018 to 8,689 recorded in June 2019. The ratio of males to females stood at 3:2,” the CA said in its latest report on the telcos’ performance.

This was on the back of a 24.4 percent jump in voice traffic that saw Kenyans make 61.7 billion minutes of calls in the year to June, up from 49.6 billion a year earlier.

“Voice service held the highest revenue share at 39.0 percent followed by other mobile services, which include mobile money services, interconnection and roaming, at 33.0 percent. SMS revenue recorded the least share at 8.0 percent,” said CA.

Safaricom recorded the highest revenue share for all mobile services, whereas Finserve Ltd recorded the least revenue share in 2018. Safaricom has recently ceded market share to Airtel, which is the second biggest operator in the country, and has recently embarked an aggressive hunt for subscribers.

Airtel Kenya’s market share based on voice traffic jumped to 34.8 percent in the year to June, from 25 percent in a similar period a year ago, according to the CA. In contrast, Safaricom’s share dipped from 70 percent to 60.6 percent in the period under review. However, the shift in market shares has failed to end Airtel’s loss-making streak.

Investors have also shrugged off these developments, with Safaricom’s shares at the NSE rising 23.9 percent over the past year to trade at Sh29.50 on the back of record profits.

The growth of jobs in the telecommunication sectors might have little impact on Kenya’s job markets given its share of the country’s gross domestic product (GDP) has been shrinking in recent years. In the absence of M-Pesa, it controls 0.8 percent of Kenya’s annual economic output compared to the dominant sectors of the economy such as agriculture, which account for 34.2 per cent of GDP, transport (eight percent), manufacturing (7.7 per cent) and real estate (seven per cent).

Official data from the Economic Survey 2019 shows that 78,400 new formal jobs were created in 2018 compared to 114,400 in 2017. This is the slowest pace of formal job growth since 2012 when the economy churned out 75,000. The data does not capture job cuts and net employment.