- IMG Courtesy Infotake.co.ke
Kenya recently opened up the market by legislation to Mobile Virtual Network Operators (MVNOs), basically meaning a mobile carrier can come in and lease infrastructure and go straight into business. New mobile carriers utilize excess capacity on the 3G and 2G sites of mobile carriers.
In Kenya’s case Airtel is the bus providing capacity to the MVNOs who include Equity Bank’s Equitel. There is a total of 5 MVNOs with intent to play in the Kenyan space, these include Zioncell, Equitel, Kenya Airways, Tangaza Money and Nakumatt.
Airtel has for quite sometime had up-to 40% of their capacity unutilized and this makes a good case for them to wholesale Base Transmitter Station (BTS) capacity. Each of these carriers have a plan as to what they want to benefit mainly when venturing into mobile carrier business.
Equity is a bank that wants to reduce the amount of money that comes out of the bank by ensuring customers trade, bank and transfer money without it leaving their vaults, something that has seen strong challenge from rival Safaricom. Tangaza money is seen as intending to create a foundation for their money transfer service by, again getting customers to stay in-house. Kenya Airways targets roamers and wants to provide the best offering for consumers who roam within and without, that’s among other things. We do not know so much about the plans of Zioncell and Nakumatt but will update you as soon as we do.
Now Equitel has already rolled out their service and it’s active but they are rolling it silently or what Kenyans prefer to term as “under the water”. They have not yet come out boldly with a grand customer acquisition strategy and their first target is to convert their customers from rival networks. Sources tell us that they are now hitting 100,000 subscribers with their service which has voice, sms and data alongside mobile money. Other SIM toolkit services are minimal in the lines of value added services but you’d expect this is in the pipeline.
Airtel says they are not afraid of cannibalization following the wholesaling of the service and are very proud to have all these 5 players ride under their infrastructure. Equitel as well as existing players Airtel and Orange face a steep task of competing with Mpesa which already has the bulk of mobile money customers and Equity bank hopes that with its vast resource of customer base and agency network they stand a chance of eating into the chunk that Safaricom commands.
Industry insider and journalist Wanjiku reckons that the space in Kenya isn’t ready for all 5 MVNOs adding that the fact that YuMobile failed in the market is clue enough that there isn’t much to look forward to, for 4 of the five that might not make it according to her. She cites the South Africa market that had high hopes for MVNOs but the success rate did not compare well with previous expectations.
Moses Gichimo of the Airtel MVNOs department is convinced there is big business to look forward to in regards to MVNOs in Kenya quoting the success rate of MVNOs in Europe which are in the hundreds.
