Safaricom Move to Cash in on Data Services

Digital Content

Competition in the mobile sector appears to have formally shifted from voice to data following revelations by market leader Safaricom and latest entrant Essar that their operations were now targeted at ramping up data revenues.

Mobile service provider Safaricom is betting on prices for Internet services dropping over the next few months as competition increases in the mobile internet market.

The firm, which says it now has over 40,000 businesses hooked up to its data services, says that it plans to start offering hosting services as it completes its transformation into a converged service provider offering voice, data and related services.

Safaricom on Monday announced that it was in the process of putting up a centre to provide managed services such as hosting servers which is seen as a potentially huge market within data provision.

Safaricom's chief commercial officer Peter Arina said the push towards data by his firm came at a time when profits made from mainstay revenue areas such as voice and SMS services were dwindling as competition in the mobile sector intensified.

In particular, he noted that some players were now offering SMS services for free an indication that profit margins would cease from that area."Invariably prices will come down in the next few months as competition among operators intensifies," said Arina.

Allen Momanyi, a system analyst with Xemplar Technologies said server hosting represented an untappped opportunity in the industry as many small and medium enterprises (SMEs) do not have the resources for routine exercises such as systems back up.

The development comes hot on the heels of an announcement by the latest entrant to the mobile industry Essar, that it had recruited one million subscribers to its network on the back of an aggressive campaign mounted using free inter-network SMS as a primary lure for new subscribers.

"This is a huge milestone for the company. Our current offer of 750 SMS for Sh75 mirrors our commitment to make communications affordable in this country," said Jayant Khosla, Essar Telecom CEO.

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