Airtel Kenya is investing Sh19 billion on infrastructure expansion to increase its mobile network services through the Mobile Virtual Networks (MVNs) platform.
This follows the licensing of three companies by the Communications Authority of Kenya (CA) to offer MVN services which will be hosted on the excess capacity of Airtel Kenya’s network. The companies, Finserve Africa Ltd, a subsidiary of Equity Bank, Zioncell Kenya and Mobile Pay Ltd who run Tangaza Pesa money transfer services are expected to spur competition and innovation within the telecommunication industry by providing consumers with a variety of choice for value. The firms will use Airtel infrastructure on a commercial basis to launch services similar to those offered by mobile telephony firms.
“All the three companies will be hosted by Airtel Kenya, the mobile network operator pioneering the MVN innovation in the country. This is complementary and their entry into the market will help stimulate and sustain overall market growth,” Airtel said in a paid-up advert in local dailies on Tuesday.
Over a million
Airtel added that they expect a wave of innovative products and service propositions that will give more choice and value to Kenyans: “This will increase uptake of mobile services in segments such as commerce and data hence accelerating economic development.”
Already, one of the housed companies Finserve Africa Ltd (Equitel) has launched its mobile money, voice, data and SMS services after a pilot phase for one year which has seen subscriber numbers grow to over a million. Equitel projects this figure to reach 10 million by 2016.
Through the MVN model, a telco with no mobile offering can strengthen its value proposition by providing a four-play offer of voice, broadband internet, TV/content and wireless.
Telco wars have been on the rise recently with the recent revision of M-Pesa money transfer tariffs by Safaricom being seen as a move to supress competition both from banks and other mobile service providers.
However, with three money transfer services on its disposal; Airtel Money, Tangaza and Equitel, the competition is expected to intensify when they all unveil their services.
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