Kenya’s Telcos Navigate Challenges Amidst Surging Popularity of Messaging Apps

Kenya’s telecommunications sector is changing, a noticeable shift is underway as traditional Short Message Service (SMS) faces challenges from the burgeoning popularity of messaging apps. As we delve into the latest industry figures, a complex narrative unfolds, revealing contrasting performances among key players.

During the three months from July to September, messaging across all networks experienced a dip of 179.1 million, settling at 12.2 billion messages. Notably, domestic SMS traffic witnessed a marginal decline of 1.4 percent, moving from 12.4 billion to 12.2 billion messages compared to the previous quarter. The on-net to off-net SMS ratio stood at 88:12, indicating a nuanced landscape of communication preferences.

Safaricom, a telecom giant commanding an impressive 89 percent of the country’s SMS market, faced a significant setback. The Safaricom network observed the largest drop, losing 190.1 million SMS to reach 10.9 billion from the previous quarter’s 11.1 billion. This change prompts a deeper exploration into the reasons behind the decline.

Conversely, Airtel, Telkom Kenya, and Jamii Telkom emerged as growth outliers in this evolving scenario. Airtel witnessed an increase of 20 million SMS, reaching 1.3 billion, while Telkom Kenya experienced an 11 million rise in text messages, totaling 16,178,792. Meanwhile, Jamii Telekom gained 102,000 text messages, reaching 770,006.

The Communications Authority’s first-quarter report for the financial year 2023/24 sheds light on the driving forces behind this transformation. The decline in SMS usage is attributed to the rising popularity of Over-The-Top (OTT) messaging platforms such as WhatsApp, Instagram, Telegram, and Signal. These platforms are gaining traction due to increased broadband coverage, intensifying competition for traditional SMS services.

On-net SMS, those sent and received within the same network, dominated the local scene, accounting for 10.7 billion of the messages sent during the period. In contrast, off-net SMS, those transmitted from one network to another, made up 1.5 billion of the total.

Looking at Safaricom’s financials, SMS revenue for the full year period ending March 31 stood at 11.38 billion, underscoring the significance of the service to the telecom giant. Despite challenges to its dominance in voice, mobile data, and SMS markets, Safaricom remains resilient, tightening its grip on mobile money through M-Pesa and exploring opportunities in the fixed internet market.

As the telecom landscape undergoes transformation, the sector’s future hinges on adaptability and innovation. The decline in traditional SMS underscores the need for telcos to navigate this shifting terrain, embracing new communication paradigms while retaining a keen focus on emerging market trends.


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