Looking back at 2010

Retirement of Michael Joseph

The year 2010 was marked with numerous historical events in the ICT industry. Perhaps most historical in the mind of most Kenyans was the retirement of Mr. Michael Joseph, former CEO of Safaricom Ltd. Robert Collymore, who until 1st November, 2010 was sitting on Safaricom board as a non-executive director, would replace Mr Joseph as CEO. Micheal Joseph, MJ, as he is popularly known, landed in Kenya in the year 2000 to lead a team of five from Vodafone and start Kenya’s first mobile service provider. In a decade, he has transformed a small department in the then Kenya Posts and Telecommunications Corporation (KP&TC) into a multi-billion shilling company. Apart from making billions of shillings in profits, the company was declared the best in the East African region. Mr. Joseph is a US citizen, holds a Bachelors of Science in Electrical Engineering from the University of Cape Town and is a member of the Institute of Electrical and Electronic Engineers (IEEE) and the Institute of Electronic Engineers (IEE), UK. His single greatest legacy would be the rollout of a mobile money transfer service, M-Pesa, which has revolutionized the way Kenyans conduct business. MJ has now has been appointed the Chairman of Kenya Tourism Board (KTB), where he will serve for a three-year term.

Reduction of 3G license fees

After months of an unending tussle between the Communications Commission of Kenya (CCK) and mobile phone operators Zain,YU and Telkom Orange, CCK has reviewed its 3G upfront license fees downwards by 60% from $25 million to $10 million. This paved a way for mobile phone operators to roll out the 3G networks which allowing subscribers to access mobile high speed data. Advancement to 4G network would not require upfront license fees. Despite registering 50 percent mobile phone penetration in Kenya, the number of people with access to broadband Internet is still much lower, a situation that was expected to change with the more players using 3G. By June 2010, Kenya had 7.8 million internet users, accounting for 19% of the population. 99.9% of these users were on mobile operator data networks. Mobile penetration stood at 51.2% then.
There had been controversy over the fees for 3G spectrum after Safaricom had challenged the downward review from $25 million it had paid in 2007. The CCK however revised the figure making it possible for other operators to acquire the license.
On 25th June, 2010, Zain become the second mobile operator after Safaricom to acquire a 3G license, owning 10megahertz on the 3G spectrum. Orange acquired the 3G license barely two days after another Zain, re-branded to Airtel, and indicated plans to roll out its own network in the first quarter of 2011. Orange will spend between 2 to 5 billion shillings to roll out the 3G network which guarantees customers access to faster internet speeds. Orange has previously offered "3G+" services on an Evolution-Data Optimized (EVDO) on Code Division Multiple Access (CDMA) technology.

Low Calling Rates

The Communications Commission of Kenya (CCK) lowered the calling rates from Sh4.42 to Sh2.21 across networks. On 18th August, 2010 Zain, re-branded Airtel, launched a Sh3 flat call rate from Zain to all other networks is a clear testimony that the Indian mobile communications giant was aggressively targeting to recruit more subscribers to its network. The drastic price cuts triggered a price war among the mobile service providers leading to the inevitable reduction of calling rates by all service providers to between Kshs.4 and Kshs.2 per minute. Airtel had already curved a name for itself in India where it operates a mass-market model that is expected to be replicated in Kenya. Safaricom had to cut its international calling rates by nearly 90 per cent in an effort to defend its market share. Among Safaricom, Zain and Orange, international call tariffs to USA, China and India were reduced to merely Kshs. 3 per minute. On 5th October, Essar’s Yu reduced it’s by 98 per cent to Sh2.50 a minute.

Mobile Number Portability Postponed

Initially, the implementation of mobile number portability (MNP) was scheduled to start December 31. This has, however, been moved to April 1 when subscribers will change networks and retain their cell phone numbers. Communications Commission of Kenya (CCK) has already contracted Porting Access BV, a Dutch firm, to up the MNP platform. The company will maintain and manage the Central data base which will facilitate the porting process. The long awaited mobile number portability (MNP) enables GSM mobile telephone users to retain their mobile telephone numbers when changing from one mobile network operator to another. The CCK announced in 2010 that all four operators should support Mobile Number Portability. Mobile number portability (MNP) has now been implemented across western European markets as several major markets outside Europe including Australia, Hong Kong, Singapore, South Korea and the USA. South Africa and Egypt have also implemented MNP.


Kenya Wins Nokia Award

During the Nokia Developer Summit 2010, held in London, Virtual City Ltd, a home-grown Kenyan company won the global Growth Economy Venture Challenge. The award was won in recognition to the company’s Mobile Distributor Solution designed to improve the distribution efficiencies for small and micro enterprises in the fast moving consumer goods market. The summit aims to boost the profitability of small and micro-businesses by increasing the number of transactions as well as improving inventory management, the accuracy of records, and reporting from the field. John Waibochi of Virtual City Ltd received Kshs. 80 Million ($ 1 million) in venture capital investment and a commitment of support from Nokia to help turn the idea into reality.