July 27, 2018 / 12:17 PM / a year ago

Telkom Kenya wants to double market share, data in focus

* Data, internet generate 50 pct of Telkom revenues

* CEO wants Safaricom declared dominant player

* Industry competition report yet to be implemented

By Duncan Miriri

NAIROBI, July 27 (Reuters) - Telkom Kenya, the country’s third biggest operator, wants to double its market share to 15 percent and is selling its transmission towers in a lease-back deal to fund expansion in data and internet services, the CEO said on Friday.

Aldo Mareuse also told Reuters that Kenya’s government should declare Safaricom a dominant telecoms operator to ensure the competitors were not pushed out of business.

“Kenya is the only country in the world which has not declared someone with more than 50 percent revenue share a dominant operator,” Mareuse said in an interview.

“The risk is this market becomes a single player market,” he said. “The industry will die. The other operators will die in the next year.”

Safaricom, 35 percent owned by South Africa’s Vodacom , controls 67 percent of Kenya’s mobile market, with close to 30 million subscribers. It controls more than 90 percent of revenue in key categories like voice.

The regulator issued a draft report on competition in the Kenyan telecoms business two years ago by

The regulator, the Communications Authority of Kenya (CA), issued a report in 2016 that included recommending Safaricom give rivals access to its transmission sites and network of mobile money outlets. It has not been implemented.

Safaricom criticised the regulator’s proposals.

Mareuse said the regulator should ensure Telkom’s mobile money service T-Kash could work with Safaricom’s M-Pesa platform on cash transfers and other transactions.

Telkom, which is 60 percent owned by London-based Helios Investment with the rest held by the government, has an 8.6 percent market share or 3.8 million subscribers, ranking it third behind Safaricom and Bharti Airtel’s Kenya unit.

Mareuse said he wanted to achieve 15 percent market share, saying the company was investing 5.5 billion shillings ($55 million) a year to expand and improve the quality of its data and internet services, which provide half its revenues.

Telkom is selling its transmission towers to America Tower Corporation and leasing them back to raise funds.

Telkom will launch balloon-powered internet with Alphabet’s Loon next year, both firms said last week.

“Once the concept is proven it will obviously provide connectivity to the remote areas,” Mareuse said.

$1 = 100.3500 Kenyan shillings Reporting by Duncan Miriri Editing by Edmund Blair

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