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Money transfers boost Kenya’s mobile phone boom

Kenya’s telecoms industry has grown to cover nearly 90% of the country’s 40 million people, with mobile money transfers accounting for the bulk of transactions, the sector regulator, the Communication Commission of Kenya (CCK), said here Tuesday.

The number of mobile phone subscribers shot up to 29.2 million between January and March 2012 up from 28.08 million in December last year, according to CCK’s third quarter figures.

The figures show that 89.10 per cent of the population has access to mobile telephony while mobile money transfer services continued to play a significant role, ensuring seamless transfer of money, mobile payments among other transactions.

At least 18.98 million people were customers of a mobile money transfer service while the total deposits handled during the quarter grew by 4.8 per cent to KSh 185.4 billion.

“The total deposits have been growing steadily over the period, a clear indication that the demand for the mobile money transfer service has continued to expand possibly due to its convenience, ease of access, acceptability and as an instrument of financial inclusion for the unbanked population in the country,” the CCK said in a report on its website.

Mobile data and Internet subscriptions on GPRS/EDGE and 3G continued to dominate the Internet market, as at 31 March, 2012.

There were 6.49 million Internet subscriptions, a 5.5 per cent increase from the previous quarter.

The shift from internet service providers is expected to affect cyber cafes, which was one of the fastest growing sectors driving retail trade in the East African nation.

“Ease of access of this service through the mobile phone and attractive promotional offers from mobile operators coupled with the popularity of social media among the young generation has, and will continue to contribute immensely to the growth of Internet market in the country,” CCK said.

Further, growth in the data market and broadband services is expected in the coming periods as result of the increase in the available international bandwidth.

However, the total used bandwidth is still very low with only 3.1 per cent utilization.

Initiatives that encourage the uptake of this capacity could be considered as this will ultimately stimulate demand for the capacity given the expected growth in demand for Internet and broadband services.

The fixed line network market segment and postal and courier industry continued to record negative growth over the period.

Fixed line services have continued to face challenges in vandalism of copper cables, high maintenance costs as well as fixed-mobile substitution.

In the postal and courier sector, a downward trend in the quantities of letters sent was recorded at 14.3 per cent. Similarly, international outgoing letters experienced a decline of 20.6 per cent. The decline could be attributed to the increasing preference in the use of Internet compared to letters.

This downward trend in the performance of the postal and courier industry could be reversed with adoption and utilization of modern ICTs.

Provision of high quality postal and courier services, coupled with a wide range of innovative products that meet customers growing expectation, could also be explored to reverse the negative trend experienced in the industry.
-0- PANA AO/VAO 10July2012

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