According to a new report published on Thursday, the volatile mobile market in Kenya and the continued price wars and changes by the country’s regulator has seen many operators look to value-generating channels in order to earn a profit. The report, published by Pyramid Research, says that private investment is expected to head in this direction in the near future.
Kenya has been in the midst of a price battle between operators that has seen mobile phone costs dramatically reduced as individual companies attempt to outdo one another.
“Kenya’s new constitution, combined with private investments in infrastructure and a quickly growing telecom sector, shines an optimistic light on the state of Kenya’s economy,” said Majd Hosn, Associate Research Analyst at Pyramid, in a press statement.
“Growth in the telecom sector is expected to create jobs and improve the standing of many financial institutions involved in investing in this sector. The Communications Commission of Kenya (CCK) will continue to encourage investments in this sector, as it eyes further expansion and penetration,” he added.
“Playing its part as a strong regulator and promoter of fair competition, the CCK slashed interconnection rates and reduced the levy for acquiring a 3G license, making it within reach for all the major operators,” continued Hosn.
It still remains unclear how far the prices in the country will drop, but Pyramid said that increasing the number of subscribers could be a major profit generator as maintaining current user levels would not see solid growth.
“Operators will find pockets of revenue-generating populations in rural areas that had been overlooked in the past. The competitive environment might call for some cooperation among providers, such as infrastructure sharing,” Hosn added.
By Staff
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