Kenya's Safaricom to drive Internet usage with 4G, TV decoders

 

Nairobi, Kenya: Kenya's Safaricom sees mobile financial services and Internet access as the next big areas of growth after calls as it builds up its 3G and 4G networks, its chief executive said.

The country's biggest telecoms operator, 40 percent owned by Britain's Vodafone, is looking to increase usage of data services through its fourth generation (4G) mobile network and multi-purpose smart digital decoders in homes.

Bob Collymore told Reuters the company has fitted about 6 percent of its 3,700 base stations with 4G technology, which gives users faster speeds and eliminates buffering when downloading video clips.

"Technology is changing. It is changing rapidly and we have to respond to it," he said in an interview on Wednesday.

Safaricom would continue to invest in 3G since many people lacked 4G enabled handsets, extending 3G coverage to 75 percent of its network by year-end from 57 percent now.

"Ultimately the majority of the people will be accessing the Internet on a handheld device," he said.

The company, which also has a fiber network in major cities to serve businesses and a small Wi-Fi network, will roll out the additional 3G sites in rural areas.

"The demand for data in rural areas is much higher than people would have assumed a couple of years ago," he said.

Collymore said the cost of the additional capacity would be in line with its guidance of a capital expenditure of 30 billion shillings ($320 million) in the financial year ended last month.

Safaricom, which is due to report its full year earnings in two weeks, expects the capital expenditure intensity to decline from this year after it completes the installation of a police information technology network whose contract it secured last year at a cost of 15 billion shillings.

The company will also partner with digital broadcasters to offer Internet data bundles, Wi-Fi and some content to homes equipped for digital television.

"That is where our point of entry into that space is going to be... It is in the long-term plan. There is a lot of exciting space to go and explore," Collymore said.

Kenya switched to digital TV broadcasting earlier this year, forcing homes with TV sets to buy set top boxes.

Collymore rejected claims by some competitors that Safaricom was benefiting unfairly from its dominant position in the market, saying they are sharing infrastructure like base stations, spectrum and mobile money agents with other operators.

"Rather than focus on trying to cut the legs off a successful Kenyan company, just focus on doing the right things in your organisation," he told those making the claims.