Airtel Kenya CEO Adil el Youssefi
Airtel Kenya CEO Adil el Youssefi
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Lately, debate has raged on social and mainstream media on whether Safaricom was actually a dominant player in Kenya’s telecommunications sector.

Those accusing the Telco of unfair dominance are quick to cite its disproportionately high numbers of subscribers and bulging market share. But they forget that Airtel (initially Kencell), which has been touted as the greatest ‘victim’ of the alleged dominance, started operations at the same time as the Vodafone-affiliated player.

I don’t think disproportionately higher customer numbers are an irrefutable pointer to one player being dominant over its competitors. In my observed opinion, having been one of the early crop of Kenyans to subscribe to a mobile provider at the turn of this century, Airtel is a victim of its own circumstances.


Consider these largely unspoken strategic blunders that have haunted Airtel and her antecedent entities:

Mistake #1- Target Market misjudged

When both Telcos started operations, Kencell, which was partly owned by Vivendi of France, largely targeted the upmarket community. It was much easier to find the telco’s services and airtime being peddled in posh, sparsely populated locations. Contrariwise, Safaricom SIM card agents and airtime salesmen milled with the masses – around matatu termini, in the suburbs, informal settlements, everywhere. Safaricom gradually started pulling away from Airtel.

Mistake #2: Agents’ Commissions

Telco providers partnered with retail outlets, shop owners, pharmacies and the like to reach the masses. It was common for these shops to stock upon and sell both Safaricom and Kencell lines. However, Safaricom paid a fatter commission to the agents for every line sold. Thus, naturally, the agents convinced anyone who wanted connectivity to join the Safaricom bandwagon. And because calls were expensive then, more so across the different networks, everyone wanted to subscribe to the same network their loved ones, siblings and business associates had signed up to.

Mistake #3: Per Second Billing

Safaricom charged subscribers on per second basis. Kencell charged per minute. This made a huge difference at a time when the cost of calls was dear. Rival ads from Safaricom and Kencell raged in the media, each trying to prove why their billing method was the best. What was obvious, however, was that with the high voice call tariffs, per second billing made much economic sense, particularly to the masses. So Safaricom won. Meanwhile, Kencell was so beleaguered by Safaricom in the media campaign that the former subsequently replaced their per-minute billing equipment.

Mistake #4: French Management at Kencell

France’s Vivendi saddled top leadership positions in Kencell with clueless, condescending French managers, who had scant understanding of local market behaviour and hardly consulted. The result was that Kencell’s marketing strategies were not congruent to the market’s adoption inclinations.

Mistake #5: Kencell Rebrands to Celtel

The French abandoned ship and Vivendi sold their stake to Celtel. The result? Kencell rebranded to Celtel. A significant portion of Kencell’s clientele, particularly upcountry, could have been forgiven for thinking that Kencell was no more. Days after the changeover, airtime agents struggled to convince Celtel subscribers that Kencell-branded recharge cards worked. It would be naïve to imagine that the rebranding did not occasion subscriber attrition.

Mistake #6: Safaricom Delights

As Celtel was bogged down by the challenges that came with rebranding, Safaricom was busy doling out value-add services. If it wasn’t 191Direct, it was Please Call Me or Sambaza Airtime. Still, MPESA was yet to come.

Mistake #7: Celtel Rebrands, Again, To Zain

Celtel globally decided to cease investments in the telco sector. So Zain of Kuwait bought them out. The attendant changes in strategy and working culture undermined innovation at the Telco. Moreover, subscribers became even more muddled by the changes.

Mistake #8: Zain Outsources Customer Service

The worst mistake any service company – be it an airline, insurer or telco, can do, it is to outsource customer service. Yet this is what Zain did. The BPO company that took over the customer service function had an interesting compensation package. Curiously, the shorter the duration of the subscriber calls it handled, the more it earned. Guess what happened as a result?

Naturally, the customer care agents rushed the calls, were poor listeners and showed little empathy to subscriber woes. Customer satisfaction levels plummeted and lots of exasperated subscribers dumped the telco. Little wonder that not too long afterwards, Zain wanted out.

Mistake #9: Zain Rebrands To Airtel

Need I say more? Airtel inherited a derelict Telco. The current owners have done little to shore up customer satisfaction and trust. Subscribers have questioned the integrity of their billing system as well.

I do not buy the argument that ascribes Airtel’s woes to a large extent on Safaricom being a dominant player. The adventure of the former has been replete with too many tactical mistakes for it to have become formidable.


In my view, the greatest challenge for Airtel right now is to restore trust and improve on her customer service. This is far more important than attempting to charm its few remaining subscribers with new innovative solutions.

On a light note, why does Airtel Kenya’s social media handler, Jamo, work 24 hours daily?

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12 COMMENTS


  1. the marketing team at airtel is doing wonders…i think their strategy when it comes to internet pricing and billing…they might just catch up with safaricom…just maybe


    • Not after how they handled the Unliminet demise: shortchanging many subscribers by altering the packages and without ever informing them. Safaricom went out of its way to make its case heard when it was discontinuing its unlimited internet service and while many of us never liked that decision, we were well informed. It did the same when it was terminating the entry-level postpaid package a few years ago. How then, does Airtel’s marketing go ahead and sell us whatever it is they have in mind next when their communications team clearly shafted us (subscribers) properly? As a subscriber, that will never go away. It’s etched in my memory.


  2. Airtel needs to do more to connect to its customers. Airtel has some very good offerings especially in data but they have a clueless and technically challenged customer service that anytime you have a problem with data service the response is usually the same (“remove your modem and insert it back in”, “is your laptop on”, “are you sure you have bundles”). They also need to act on the feedback and criticism, feedback can be flipped and used to provide better service or even launch a new product. Not every critic is a “hater” as is now the norm in KE.


  3. Unless Airtel can come up with a very revolutionary and innovative product akin to Mpesa,they are done for good and will always remain an afterthought when it comes to Telcos.That is if, neither government intervenes in a drastic manner using regulation, or Safaricom blunders big time, both of which are unlikely to happen in the foreseeable future.


  4. Airtel should focus more on bringing the next big think to Kenya rather that trying to bring down Safaricom. Remember how M-Pesa just took Kenya by storm, changed everything and now eveyone has it?
    UnlimiNet is good, but not good enough. Yes, people in Kenya want affordable things but if that were the reason, more people would be switching to Airtel daily.
    There is still hope though since Airtel’s situation isn’t as bad as that of Orange.
    🙂


  5. Interesting article, however I have a few issues to point out.

    1. A background or definition of the predicament would be welcome for anyone who’s not been following news or maybe a foreigner looking for insight

    2. As an Airtel user, I’d largely describe the reasons highlighted – which haven’t affected many like me from switching – as historical. I do however agree that having to deal with customer care in the past has been a nightmare. I’ll however point out that I only had to deal with them regarding SIM-replacement meaning they probably have systems that work very well

    3. As an Airtel user, another reason you missed is probably Airtel money. This is a fantastic product from a development and security point of view which however makes it complicated to use. An example is moving cash from Bank to Airtel-money. You have to go to your bank and authorise access which is not bad but how about an open-api like mpesa and paybill numbers which make this transaction flawless?

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