Telcos enrich content in data market rivalry

by Mark Okutta in today’s Business Daily

The race to control the data market has been pushed a notch higher with Safaricom, Telkom Kenya and AccessKenya boosting content to attract more subscribers.

The three have formed partnerships to provide music, traffic updates, learning and health information online in the search for more revenue from value-added services as stiff competition moderates returns from voice traffic.

Telcos used technology and access to retain customers before they moved to hardware and Internet accessories such as laptops and mobile phones.

The value-adds represent the third phase of the intense rivalry in the sector.

AccessKenya threw the first salvo on Monday by introducing traffic cameras that will be accessed for free by motorists within Nairobi and it is aiming to use this strategy to attract Internet users onto its website and later use as a bargaining power to charge clients who post commercial adverts.A day later, Safaricom announced a partnership with more than 10 top local musicians in an arrangement that will see the company sell songs on its online portal and share the commissions or sell musicians’ portraits as wallpapers and share the proceeds.

Telkom Kenya on Wednesday announced that it will build an online information store for educational and health information.

The company has also entered into partnership with a value-added service provider Data Dimension to develop learning materials for secondary schools in Kenya.

Its parent company France Telecom is in talks with the Ministry of Health to rollout an e-health platform that will allow a doctor in Nairobi to attend to a patient in a remote area.

Mr Nzioka Waita, the head of strategy and new business at Safaricom, says they aim at using their extra Internet capacity to boost revenue.

“We are going to focus more on the data and value-added service to supplement our voice revenue, which has been eroded by the recent tariff reductions” said Mr Waita.

The prices for voice SMS have dropped by 50 per cent and are now as low as Sh3 and Sh1 respectively.

Analysts have pointed out that the rock-bottom voice rates meant operators had to bet on value-added products to remain afloat.

Mr Peter Wanyonyi, an ICT analyst, says voice revenues have stagnated and product diversification was one of the ways to grow revenue.

“Value-added services and similar offerings [like mobile commerce] might be one way of making money in such an ultra-competitive market,” said Mr Wanyonyi.

Safaricom has entered into a three-year deal with musicians like Swabri Mohammed, popularly known as Redsan, David Mathenge (Nameless), Wahu, Paul Nunda (Jua Cali), John Okinyi (Osogo Winyo) and Kennedy Wambua (Ken wa Maria) who will be entitled to a monthly retainer and a commission on music downloads.

None of the parties was willing to reveal the retainer amount.

However, Nameless said the retainer would be guided by popularity. Safaricom is collaborating with HomeBoyz and the artistes to record music.

Traffic movement

MrJonathan Somen, the AccessKenya managing director, says traffic updates consist of Internet Protocol (IP) cameras that will capture traffic movement and transmit images via the AccessKenya portal,, in real time.

AccessKenya has so far mounted 27cameras within the Nairobi’s Central Business District and its environs; it has two in Mombasa.

“The has recorded thousands of hits one day after the installation of the cameras thus creating a huge opportunity for online advertisers,” said Mr Somen.

Telkom Kenya has also partnered with Equity Bank to offer laptops and smart phones on loan.

“Growth in data access requires a threefold approach targeting availability of bandwidth, affordable devices and reasonable pricing,” said Telkom Kenya CEO, Mickael Ghossein.

Telkom Kenya will provide the devices at Orange shops across the country while Equity Bank provides the loan.

There are slightly more than three million Internet users in Kenya and more than 20 million mobile subscribers.

According to the recent Census report, a paltry 3.6 per cent of the Kenyan households have a computer while 63.2 per cent of households own phones.

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