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Mobile Customers in Kenya Can Keep NumbersPosted by: admin on Thu, 2011-04-07 09:47
Mobile number portability launched this month in Kenya. As the telecom industry worries about the impact on its bottom line, mobile subscribers should now have more choices than ever.
April ushered in a new era for mobile phone subscribers and Kenya’s telecommunications industry. On April 1, companies officially started offering mobile number portability (MNP) – allowing subscribers to switch networks without changing their preferred numbers.
While there is a small one-time fee to switch operators, consumers stand to benefit most from the advent of number portability. Now free to move from operator to operator, companies will be forced to compete for business by focusing on the quality and value of the services they offer. Rivalry among operators is already shifting away from voice services due to declining revenues and moving more toward value-added services and innovation. Based on the experience of MNP adoption in other markets, subscribers will also be able to buy cheap phones through special offers from an operator, and then switch to another service provider of their choice.
By introducing mobile number portability, Kenya will be joining other African countries like South Africa, Nigeria and Egypt that have made the switch. Kenya’s telecommunications regulatory agency, the Communications Commission of Kenya (CCK), has insisted that number porting was initially supposed to begin in December 31, 2010, but was delayed due to logistical issues. The CCK promoted MNP in part to increase competition in the mobile market.
Little consumer knowledge of number portability
Public awareness of number porting is considered limited. Although mobile operators have been running advertising campaigns in newspapers about MNP, the information provided on the process is little and might lock out rural populations.
Speaking to AudienceScapes, Isaac Mwangi, a hawker at Nairobi’s Ngara market admitted to having heard the “big news about mobile number portability” but was not aware he would be required to pay to be able to switch numbers.
“Kwani sio free ? (Swahili for ‘you mean it is not free?’),” he said.
Some operators, like Airtel Kenya, have offered to cover the subscriber charge for number porting, in a bid to encourage subscribers to switch to their network. This indicates the operators realize that the one-time fee will keep some subscribers from switching networks. All four operators have promised to give freebies to subscribers who switch to their networks. Gifts up for grabs include free airtime, customer loyalty points and free data services.
Mobile operators wary of MNP
The country’s four mobile operators -- Safaricom, Zain, Essar (YU) and Telkom Kenya (Orange) – have eyed the adoption of MNP with caution. Following last year’s price wars, they are worried about the impact number porting will have on the financial health of the industry. Revenues dropped significantly as a result of this tariff competition, bringing down call rates by 50-75 percent.
Safaricom CEO Bob Collymore says the industry is expected to lose up to USD$250 million this year due to the price wars and intense competition among operators as they struggle to hold on to subscribers.
Service quality driving customer decision to switch
Customer experience will be the major reason why subscribers would opt to switch from one operator to the other, according to Telkom Kenya’s CEO Mickael Ghossein.
“If MNP has gone live last year when call rates were still high, then subscribers would switch operators to find affordable rates,” said Ghossein. “However, with the rates almost at par, it is the services operators offer that will be the determine factors of whether they keep or lose subscribers.”
The operator expected to be most affection by the adoption of MNP is Safaricom, which controls more than 70 percent of the market share. Analysts speculate that its market share will decline. The firm is hoping to retain clients through its value-added services, such as the mobile money transfer service M-Pesa. Subscribers who switch from Safaricom will automatically lose the M-Pesa service.
“Potentially we can be the biggest losers, but all we have to do is ensure that we look at our spending customers and offer the services that they need,” Safaricom’s Les Bailey said last month. “Though price can be an issue to a portion of the market it is not just about the price.”
Bailey pointed to South Africa’s experience with number portability as a sign for optimism. Since the 2006 rollout of MNP there, Vodacom and MTN have not been widely affected.
Dinfin Mulupi is a business journalist based in Nairobi, Kenya. She is currently the East Africa correspondent for an online business paper based in Cape Town in South Africa.
Picture Courtesy- Rogiro via Flickr