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XINHUA NEWS SERVICE REPORTS FROM THE AFRICAN CONTINENT

 

Latest Facebook low-cost internet shakes Kenyan data markets

NAIROBI (Xinhua) -- The entrance of U.S. tech giant Facebook in the Kenyan internet market has triggered price wars among telecoms, with each fighting to protect their market.

The U.S. firm introduced its low-cost internet in the East African nation about a month ago, stepping up competition with telecoms that were already in fierce rivalry before Facebook entrance.

Facebook, following a partnership with a local firm, introduced its Express Wi-fi data bundles that cost 40 megabyte (MB) at 0.10 dollars, 100 MB at 0.20 U.S. dollars, 300MB at 0.50 dollars, 25 gigabyte (GB) at 2 dollars and 3GB at 5 dollars.

While the service is available in few select suburbs in Nairobi and its environs, Facebook has triggered fierce price wars in the Kenyan market pushing internet charges considerably down as data becomes the latest battleground for telecoms.

With revenue from voice having plateaued and mobile money market firmly in the hands of leading telecom Safaricom, amid the surge in smartphones, data is the new frontier to grow revenue.

Safaricom, Orange and Airtel are, therefore, fighting to attract and keep internet users on their networks with lower tariffs that have seen Kenyans pay 4.9 U.S. dollars for 1.2 gigabyte (GB) of data for a month, what was not there before Facebook’s arrival.

The data bundles, for some telecoms, comes with free voice minutes and SMSs across all networks every day as they seek to leverage on what Facebook cannot offer.

Safaricom is the leading mobile data provider with 63 percent market share, followed by Airtel Kenya at 21 percent and Orange at 7 percent.

The others are Finserve and Sema Ltd.

Orange and Airtel are eager to raise their market share, thus, have come up with irresistibly lower prices to customers as they also fights off Facebook.

"Get bundles that are worth every cent. 250MB at 1 U.S. dollars for 7 days," offered Airtel Tuesday.

On the other hand, Orange is selling 20MB at 0.17 dollars which lasts for seven days and comes with free calls, like Airtel having revised the charges downwards the last two weeks ago.

The two telecoms are lower than their rival Safaricom, and they have forced it to push its charges even lower as it seeks to guard its subscribers.

"Browse for less with Safaricom daily bundles of 35MB plus 35 SMSs at 0.20 dollars," the company told subscribers Tuesday in an advert. Safaricom’s mobile data revenue in its latest financial results grew 46 per cent to 13 million dollars.

As at September last year, according to the Communication Authority of Kenya (CA), internet subscriptions stood at 27 million, with users hitting 38 million to push data penetration level across the country at 85.3 per cent.

Mobile data subscriptions account for 99 per cent of the total internet subscriptions in Kenya, which present a huge opportunity to telecoms that have revised their charges downwards to lure users on their side.

Bernard Mwaso, a consultant with Edell IT Solutions in Nairobi noted that internet use in Kenya can only go up for now while charges come down because of two things.

"First is that everyone wants to own a smart phone which are driving data usage and second, internet has become a basic service for Kenyans who need to socialise, do their banking, research and access government services," he noted, adding that data Facebook has shaken the Kenyan market.

Communication Authority attributes rise in uptake of internet to competition among service providers through offering of promotions.

"The internet usage continues to grow in the country, bringing with it new ways of transacting, communicating, learning, socialising and transforming every aspect of daily life. With the expanded availability of internet bandwidth, the growth of internet usage is expected to rise in the country," says the regulator.

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