Emerging markets: Mobile market review: Kenya 2009

I had recently the opportunity of speaking with the CEO of one of the mobile operators in Kenya and I realized how competitive the situation is turning even in the supposed “emerging markets”. Having worked in neighbour countries such Ethiopia (that is in a higher level of immaturity) or Sudan (which has significant similarities),  it’s not difficult to defend that it’s really a emerging market as there’ll be stiff competition among network operators for a Telecom market that will grow by 95 percent over the next five years.

As in any market, the introduction of new players in the Kenyan mobile market has created strong competition. While Safaricom and Zain alone ruled the market until very recently, new companies such as Essar Telekom Kenya and Orange now are penetrating the Kenyan market successfully. This has forced the operators to cut tariffs and introduce new air time promotions driving the market into a value dilution and ARPU erosion spiral.

Having said this, Kenya shows impressive growth rates with significant opportunity, as by the end of 2008, Kenya had more than 15.0 million mobile subscribers, with a mobile penetration rate of 39 percent and with a subscriber base forecast of 29.28 million, or 66.7 percent penetration, by year-end 2013.

The forecasts unveil that total revenue of Kenya’s telecom market will grow by 42 percent from $1.39 billion in 2008 to $1.98 billion by 2013. Among these, 78 percent of the total revenue to be generated by the mobile sector. Net, net, there’s real room for growth.As usually, we have prepared a brief telecom market review of the market. We will be hopefully working there shortly so don’t hesitate to update this post with any update comment. Please find next mmC Group’s assessment on the Kenyan market.

Best, CVA.