Zain to tap rural market in pursuit of growth

A leading mobile phone service provider in Africa and the Middle East, Zain is following its success in Nigeria in Kenya where it plans to increase its investments this year in upgrading and expanding its networks to broaden its presence and marketshare in the rural areas.

The move is to capitalise on the considerable growth in its subscribers and potential in the rural areas, which are expected to become a pivotal market within Zain’s array of operations this year.

“On the back of excellent market response in 2008, we are looking forward to expand our network and introduce new value added services like the M-Banking solution this quarter” Zain’s Kenya Managing Director, Rene Meza, said on Friday.

“We have experienced strong customer growth, especially with our Vuka Tarrif and expect this trend to continue in 2009,” he added.

Speaking during the presentation of cash awards to the just concluded Jishindie Bonus Promotion in Nairobi, he noted that the Vuka tariff had led to a 50 percent increase in its subscribers and a substantial growth in minutes.

Commenting on upcoming mobile telephoning companies, Rene said the companies would face stiff challenges this year as a result of the global economic crisis and Kenya would be no exemption.

“There is a severe drought in Kenya with 10 million people facing starvation, this combined with the global economic crisis, there will be less capital expansion projects as companies strive to stay afloat and maintain their customer base. It is a rough year and Kenyans will be debating either to buy food or airtime,” he pointed out.

According to him, the cost of capital is very high, thereby a rough time for the new investors in the market, adding “the new companies have a major challenge in setting up their network masts.”

On M-Baking, Rene said the company was ready to roll out in the next few months, noting that Zain was ready financially and technically and was only waiting for approval from the Central Bank of Kenya.