Telecoms sector showing signs of slowdown
By Bankole Orimisan with Agency Reports
MORE indications that the high-paced growth that has characterised Kenya's telecommunications industry is slowing down have emerged, following the country's low ranking in the International Telecommunications Union (ITU) Information and Communications Technology (ICT) development Index.
Despite the gains made in the telecoms sector in the last seven years, Kenya maintained the same ranking it held in 2002, coming in at number 116 out of 154 countries around the world.
ITU said the ranking indicated the country was still affected by the digital divide, which is the term used to indicate the chasm between countries with adequate communications and those without.
"Despite significant improvements, the gap between the ICT haves and have-nots remains. Based on the concept that the digital divide is "relative" - meaning that it compares ICT developments in one country with those in another country - this shows that overall the magnitude of the global digital divide remains unchanged between 2002 and 2007," said ITU.
The digital divide could have economic implications for the less developed countries as the world embraces the age of information, said ITU.
Two weeks ago, a report by Business Monitor International (BMI) indicated that players in the formerly fast growing mobile sector had recorded lower subscription rates this year, signalling the fast-paced growth in the industry was starting to plateau.
BMI noted that the mobile sector as a whole lost 17,000 subscribers this quarter, but said it expected to see more than six million new subscribers in 2009.
But the latest figures from the Communications Commission of Kenya (CCK) indicate that those targets may not be possible. In its quarterly report released this week, CCK said while mobile services continued to be the most popular means of communication in the country, Kenyans are spending less on cell phones.
There are also fewer new subscriptions to mobile services sector, which analysts say can act as a rough guide to the levels of communication access in the country due to its widespread uptake.
The four licensed mobile operators - Safaricom, Zain, Telkom Kenya and Essar - held a combined subscriber base of 17.4 million at the close of the quarter ending June 2009 against 17.1 million subscribers in the quarter ending March 2009, representing just 1.8 per cent growth. This figure is significantly low compared to the 11.9 per cent growth recorded in the first quarter of the year.
"There was also a 43 per cent decline in talk-time totalling four million minutes in mobile to fixed network traffic.
Conversely, the total number of local Short Messaging Service (SMS) increased to 8.5 million from eight million in the previous quarter, representing a five per cent growth within the quarter," said the regulator in its Quarterly Sector Statistics report.
CCK also said that the total Minutes of Use (MoU) per subscriber per month recorded marginal gains, rising from 46.9 in the quarter ending March 2009 to 47.9 minutes in the quarter under review.
During the same period last year, the average subscriber talked for 63 minutes in a month.
This confirms industry projections that consumers would spend less on communications as a depressed economy, the food crisis and rising inflation took a toll on the disposable income of their subscribers.
"We can expect that our subscribers will spend less on airtime as the prevailing economic situations continues," said Rene Meza, Zain Kenya chief executive officer in a previous interview.
Revenues per user have also decreased during the period under review, meaning mobile operators can expect to file reduced earnings for the quarter.
On the other hand, the number of SMS per subscriber in a month increased from 47 in March 2009 to 49 in June 2009, representing a 3.8 per cent increase. Even so, CCK noted that voice calls have remained the primary means of communication by subscribers as opposed to the use of SMS.
