Safaricom, Telecom, Airtel Kenya and YU Lose Millions

Safaricom, Telecom, Airtel Kenya and YU will continue to lose millions due to the emergence of messaging applications. Smartphones have brought new ways of doing things.  Today, most Kenyans use free applications to make their life easy. One of these applications is WhatsApp. WhatsApp allows its users to send videos, pictures and text messages for free. All that is needed is data bundles. The app makes the cost of sending messages, images and videos by far much cheaper than sending through the normal networks.  This has led to a huge drop on revenue for telecommunication firms Kenya.

Although Airtel Kenya, Safaricom, Telecom and Essar Kenya have all expanded their capacity to handle multimedia messages, the number of multimedia messages being sent by subscriber has constantly been dropping over the recent years.  Statistics from CCK (Communications commission of Kenya) show that multimedia messages dropped by close to 15%.  A report by CCK says that the cause of the drop may be competition from the messaging application such as WhatsApp and the high cost of using the MMS services.

WhatsApp allows its users to send messages at a very low cost. With the tough economic times, one can understand why most Kenyans are opting to use it.  Just with 5MB data, you can send hundreds of messages to several people. The average cost of 5MB data in networks in Kenya is KSh 5. When you send MMS over the normal networks, you can only send 5 messages with Ksh 5. 

The apps are hurting telecommunication firms revenue all over the world, not only in Kenya. Globally, telecommunication companies are losing close to $10 billion annually due to Internet enabled messaging apps. 

Although they hurt the profit of telecommunication firms, the apps are viewed as a good thing to consumers who now pay less to send text messages, pictures and videos. If this trend continues, there is no doubt the multimedia messaging will be dominated apps in future.