Data services are now the joint leading source of revenue for telcos alongside voice, amid rising rivalry for the growing internet market and entry of new cash-rich foreign players.
Analysis of industry data from the Communications Authority of Kenya (CA) shows that data services generated 27.3 percent or Sh107.2 billion in revenue to telcos last year, the same as what was generated from calls.
The share of revenue from data has been rising over the years from 24.7 percent four years ago while that of voice has been on a steady decline from holding more than a third of the revenues or 35.8 percent in the same period.
Starlink, which is owned by American billionaire Elon Musk, recently entered Kenya, offering satellite-based internet services whose popularity is rising mainly due to the high internet speed.
Safaricom, the dominant player in the local voice, mobile, and fixed data markets acknowledged the dimming prospects of the once dominant voice market.
“Voice revenue declined by 1.7 percent year- on- year to Sh79.51 billion reflecting the global impact of the downward trend of voice service,” Safaricom said in its latest annual report.
Safaricom holds 36.4 percent of the fixed internet market, followed by Jamii Telecommunications at 24 percent while the once-dominant Wananchi-owned Zuku is third at 17.5 percent.
But Safaricom has been rattled by entry of Starlink and has already called on the government to bar the American firm from operating locally.
Starlink has since its entry into Kenya last year gained 0.5 percent of the internet market in the country, ruffling Safaricom and potentially upping competition on scores of other local firms jostling for the fixed internet market.
The popularity of fixed and mobile data continues to grow amid the rise in remote working and preference for internet-based platforms such as WhatsApp, Google Voice, Skype, and Google Duo.
“Total fixed data/internet subscriptions experienced growth driven by increasing reliance on digital platforms for work, education, healthcare, and entertainment, along with attractive tariffs and special offers from service providers,” CA says in its latest report on the telecoms industry.
But despite the continued drop in revenues from voice, telcos are making more money from mobile services.
Last year, mobile service revenues to telcos amounted to Sh384.3 billion up from Sh339.4 billion. CA adds that the growing internet market offers telcos one of the revenue streams with the highest growth potential.
Besides voice, the contribution of short message services (SMS) to the revenues of telcos has also been on a sustained dip over the years, mainly due to the growing popularity of internet-based channels.
Last year, SMS contributed 4.6 percent of the revenues that telcos made, or an equivalent of Sh17.7 billion, compared to the 5.8 percent in 2020.
Telcos have seen revenues from calls dip significantly amid increased competition from internet-based platforms such as among others.
A cut-throat fight for the market has further forced the telcos, notably Safaricom and Airtel to slash calling rates and give subscribers offers, in a bid to retain them as opposed to growing revenues.
