Competition in Kenya’s telecom market is set to become dramatic for observers and investment analysts following plans by Equity Group Holding to push Equitel, its telecom business, to cut a bigger pie of voice, data and text market.
Yesterday, Jack Ngare who is the managing director for Finserve, the Equity Group’s subsidiary that runs the Equitel brand announced that the telco will be pushed very hard in the market.
“I can tell you that we will push the telco business very hard this year. We will push because we have seen that this country has become a grave yard of telco businesses that came here and died. We are convinced that Equitel has the scope and the methods to succeed where others have failed,” said Ngare.
He was speaking when the banking group announced financial results for 2016.
Ngare’s announcement is significant given what Equitel has achieved achievement in the last 15 months of its existence.
Equitel now controls 20.3 percent market share in mobile money transfer business against Safaricom’s market share which has dropped to 78.7 percent.
According to results presented to Equity Group’s shareholders earlier today, Equitel’s transactions increased to 227 million transactions in 2016 from 94 million in 2015 while value of the transactions increased to Sh364.4 billion from Sh98 billion.
Currently, Equitel has 2.7 million subscribers of whom 2.48 million have linked the sim cards to their Equity Bank accounts. Equitel has disbursed over 5 million loans in the year with a value of Sh38 billion.
Since inception in the 3rd quarter of 2015, Equitel has been sold as a financial service whose voice, data and text only served as value-added services. But the announcement today may mean the bank may have found the keys to upsetting the equation in the telecom market which has eluded seven other telcos.
As he spoke today Ngare alluded to the many telcos that have entered the Kenyan market but found competition from Kenya’s biggest telco, Safaricom too stiff and to some extent even unfair.
Already, there have been widespread fears that Bharti Airtel which operates Aitel Kenya, Safaricom’s main competitor, is set to exit the Kenyan market citing strong arm tactics the dominant player uses to bully other players out of the market. France Telecom which operates the Orange brand at Telkom Kenya is also seeking a way of Kenya over similar reasons.
Other firms that have exited Kenya are Vivendi, Celtel, Zain and Essar Telecom (which operated the Yu brand).
It will be interesting to watch the strategies that Equitel will employ to capture a respectable voice, text and data market share which are now in Safaricom’s vice tight grip.