Zain eyes mobile market leadership in Kenya

By Duncan Miriri

Zain plans to invest more than Sh25 billion shillings in the next 18 months in a bid to gain market leadership in Kenya’s 20 million mobile phone market, its country managing director said.

Ranked the second largest operator by users in the country, Zain was acquired by India’s Bharti Airtel as part of an Africa-wide deal. The new planned investment is double what Bharti had initially said it will put in. Last week, Zain halved its calling and text messaging charges, sending shares of rival Safaricom skidding.

"We have started a new journey in the market and the journey is called market leadership," Rene Meza told Reuters on Tuesday.

"It is going to be a long journey, a very tough one. But for the first time in eight years, we have the right majority shareholders, with the understanding and the mindset of what it takes for us to do in Kenya, to become market leaders."

Although the firm, which began as Kencell, was one of the first players in the industry, it was hobbled by a focus on the top end of the market, locking out the majority of Kenyans who are on low incomes.

Safaricom, which typically accounts for more than half the shares traded each day on the Nairobi Stock Exchange, conquered 80 per cent of the market by focusing on all segments, with post-paid services for the rich, and prepaid scratch cards for as little as Sh20 for lower-paid users.

"We are planning to invest over Sh25 billion over the next 18 months. It is an investment plan we had to revise upwards," Meza said.

He added Zain would increase its distributors to 200 from 80, and launch third generation (3G) internet access by year-end.

Under the first phase, the firm will focus on revenue growth, subscriber growth and revenue growth, before turning attention to margins.

—Reuters