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Telecom firms intensify battle for Kenya’s bottom market

NAIROBI (Xinhua) -- Every morning, the first thing university student Amos Katune does after he wakes up is to buy internet bundles for his phone.

Katune buys data bundles of between 10 megabyte (MB) and 50MB depending on his needs and the money he has.

“The small daily subscription works for me best because it helps me manage my data usage. Besides, it is pocket friendly since even if I have only 0.10 U.S. dollars, I am able to buy bundles that can last me the entire day,” said Katune on Tuesday.

His purchase and usage of mobile data mirrors that of millions of residents in the East African nation, where most phone users purchase internet data bundles in small packages.

The practice has prompted mobile phone service providers to come up with products that serve the bottom-segment market amid stagnated incomes and rising living cost worsened by new taxes.

So huge is the market that the telecommunication firms are battling to win the market by coming up with various products that target the low income earners.

Major phone companies Safaricom, Airtel and Telkom have data bundles that start from as low as 5MB, which cost 0.05 dollars, enabling low-income Kenyans to use the internet.

A recent move by two of the telecoms to withdraw low denomination bundles led to outcry from consumers, forcing them to reinstate the services.

The companies further make and sell their airtime scratch cards with the low-income consumer in mind.

The mode of marketing and selling goods in smaller quantities in the East African nation is dubbed kadogo economy and is pervasive in all sectors.

“Kadogo economy caters for the small person like me. I earn on average 10 dollars a day from my motorcycle taxi business. I use this money to cater for all my needs, therefore, I must budget well. On mobile airtime and internet bundles, I spend at most 0.30 dollars a day,” said David Kinyanjui, a motorbike taxi operator in Kayole.

Kinyanjui noted that he buys most of the items for use at home in the smaller packages almost every day, because that is what he can afford.

Over years, consumers would buy only internet bundles or airtime for 0.05 dollars but the companies have bettered their experiences, enabling one to get an array of services from the cash.

For instance, for 0.10 dollars bundle, some of the firms now offer 10MB data, free SMSs and free usage of WhatsApp the entire day.

Bernard Mwaso, a consultant with Edell IT Solution in Nairobi, noted that the upside selling of small data bundles increases usage and access.

“The telecoms are conforming to consumer habits and as any other manufacturers, they are aware of Kenyans’ spending habits. The good thing is that smaller data bundles encourage more usage,” he noted.

The number of internet users in Kenya stands at more than 30 million with subscriptions hitting over 20 million, according to the Communication Authority of Kenya.



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