Airtel explains why Safaricom beat them to 4G rollout

Mobile phone operator, Airtel Kenya, is angling for a piece of the data business boom. The firm, second mobile operator in terms of market share, will unveil its super fast Internet service—the fourth generation (4G) network in the first quarter of next year.

The revelation comes a few days after its main competitor, Safaricom on December 4, launched Kenya’s first 4G Internet service. Mobile operators are seeking to further grow their data business to counter slowing voice segment.

Airtel Kenya CEO Adil El Youssefi in an interview with Weekend Business said their 4G network will be ready next year. With 4G, it makes it possible for consumers to stream videos live, listen to music online, or hold video conferences. This is the most modern mobile technology and offers super-fast Internet speeds.

El Youssefi (pictured) noted that Airtel is no stranger to 4G network. “Airtel is the fourth largest mobile operator in the world. Airtel is the second largest in Africa in terms of size and the largest in terms of 3G network in Africa,” he said adding that Airtel was one of the first to launch 4G network in Africa. “I launched it (4G network) in Rwanda, and in Seychelles,” said El Youssefi.

“For Kenya, it is not about lack of ability or lack of financial power. It is more the fact that we are constrained (from launching 4G network) by the prerequisite to actually compete equally with the dominant player,” he said.

The Airtel CEO noted that they have been hampered by limited spectrum. “We need spectrum. Today, the dominant player has the most spectrum for any mobile operator in the world,” he said.

As such even with the launch of their 4G network, their customers are still likely to experience less speed than that of the “dominant player” due to “sheer number of spectrum that they have.” “We are talking with the regulator. We are talking with government to see if we want a strong number two—if we want Airtel to compete well then we need to have access to the same quantity of spectrum that the competitor is accessing.”

Choice to consumers

The CEO is hopeful that the regulator and the Government will answer positively to their request. “And after the digital migration which is planned very soon, we hope that we will be allocated a portion of that very valuable spectrum to use to launch 4G,” he said.

“We are ready to compete, we are ready to provide choice for our consumers with the limited spectrum that we have,” he said, adding: “Today we have limited spectrum that we are using for our 3G services. We will re-use some of it to launch 4G but again it will in no way compare with the quality of spectrum and the quality of services that the dominant player launched for their 4G.” Besides spectrum, the other deterrent the CEO noted that hampered their launch of 4G network has been a lack of level playing field.

“If those things are availed to us, as they are in any market in the world where there is dominance, Gabon, South Africa, Rwanda, Ghana and many markets, we will be able to provide choice to consumers and compete where we should,” El Youssefi said.

But when launching Safaricom’s 4G network, Safaricom CEO Bob Collymore said: “Today’s launch progresses our strategic push to democratise data. We believe in the transformative power of the Internet and are keen to deliver the most advanced technologies to our subscribers in order to remain the network of choice.”

In addition to deploying the new network, the Safaricom said it will offer affordable devices through its partnerships with global phone makers. Mr Collymore said Safaricom is keen to supply affordable 4G-enabled devices including phones, routers and modems to the market, with a Sh9,000 phone planned for early next year.

Lengthy process

Mobile service providers in the country are struggling to capitalise on other sources of revenue as traditional sources like voice and SMS have registered declined growth rates. Safaricom, saw its revenue from data increase by more than half in the six months to September. The company last month announced impressive first-half pretax numbers with profits rising by almost a third to sit at Sh21.1 billion in the half-year ended September. Revenues from data and M-Pesa services made up almost 40 per cent of the revenues with the company’s voice division growing by just 6 per cent over the same period.

Safaricom will be spending Sh32 billion on its network this financial year up from Sh27 billion the previous year with Chinese telecommunications firm Huawei providing the infrastructure support for the LTE rollout.

The launch of the network by Safaricom is a feather in the cap for the mobile service provider, which last year pulled out of talks to establish a shared 4G network infrastructure on a government and private sector partnership model. Safaricom cited a ‘lengthy consultative process’ for the exit.