Safaricom Slows Expansion Of 5G Due To High Phone Prices
Safaricom has said it will slow the rollout of the fifth-generation network because of expensive 5G mobile phones. According to the giant telco company, a larger number of mobile phone users need to acquire 5G phones before they can set up more sites for the super-fast network.
Until then, it will continue targeting homes and offices that have already been covered by its fiber network as it looks to take advantage of the growing number of mobile internet users in the near future.
4G Network to Continue For Mobile Phones
Safaricom CEO Peter Ndegwa said mobile phones that can use a 5G network are costly, and as such, they will continue with 4G for mobile internet and only serve 5G to homes and offices.
There are only a few 5G mobile phones in the market, with the handsets going for over Sh100,000. Many mobile phone users who wish to experience the 5G network have been highly discouraged by the high prices despite the desire to embrace services like Ultra-HD video streaming and real-time 3D gaming.
The fifth-generation network is part of Safaricom’s strategy to expand its business portfolio to counter the lower revenues generated from voice calls.
The telco rolled out a 5G network in populated urban areas with high data traffic. This included Nairobi, Kisumu, Kakamega, and Kisii. The technology was applied on trial, and it only accounts for a small portion of the capital expenditure.
5G Network To Expand Safaricom’s Business Portfolio
According to Safaricom’s chief financial officer Dilip Pal, the best way to monetize the 5G network is to start with fixed wireless opportunity, which is the direction they intend to take. He further said it would be on a smaller scale before expanding into a monetization level and scaling up in the future. Britain’s Vodafone and South Africa’s Vodacom are some of the major shareholders at Safaricom.
The telco has been generating limited revenue on mobile calls mainly due to market saturation. It has had to rely on other services like M-Pesa and Internet to steer future growth.
Revenue Generated in Voice and Text
Revenue generated from voice increased by 0.8% to sh83.2 billion in the year to March. M-Pesa grew 30.3% to Sh107.6 billion, while mobile data jumped 8.1% to Sh48.4 billion.
To increase the number of smartphone users on its network, Safaricom partnered with Google. The partnership program makes it possible for customers to pay for phones that are 4G enabled.
The program requires customers to pay only Sh20 per day for 9 months. It aims to get more than 4 million people using 2G and 3G phones to switch to 4G.
Road to 5G In Kenya
Safaricom is the largest telco company in Kenya, controlling about 70% of the market. When successfully implemented, the 5G network will help individuals and businesses to use 5G network. They can do it at home, at work, or on the move.
This will enable to telco giant to into the growing mobile internet market in the country. According to Chipmaker Qualcomm, 5G could achieve faster download and browsing speeds than 4G.
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