COVID-19 Offers a Silver Lining for Telcos

Mobile phone operator Safaricom Limited is on the list of companies that are thriving during the COVID19 crisis. This is as more subscribers load up data bundles to enable work and online entertainment while staying at home.

The firm has reported a 70 per cent surge in data usage and 40 per cent in traffic on its network as more customers work from home, watch movies or socialize. Its closest rival Telkom Kenya has already reported recorded a 50 per cent increase in data consumption on its network, as customer stay indoors. Following the closure of schools and colleges, students have resorted to studying online, a boon to mobile phone operators.

Data usage on mobile and fixed home internet supports and other streaming sites such as YouTube and Netflix.

While Safaricom is experiencing an upsurge in data usage, the firm reports that its Mpesa revenue will suffer due to the firm’s waiver on charges for those sending amounts of less than KSh 1,000. The firm expects a reduction in Mpesa revenue by KSh 5.5 billion over the next three months due to waivers and tariff adjustments.

According to Safaricom CEO Peter Ndegwa, the firm expects to ride the wave and get back on the saddle once this pandemic eases off.

All mobile operators have waived charges on all cash transfers of less than KSh 1,000. Safaricom and other mobile operators expect increased usage of electronic cash transfers as more people dump cash during the crisis.

Safaricom remains cautious in its projections, preferring to see how customers react to the current crisis. The firm has doubled Internet speeds for its fibre customers, estimated at close to 300,000 homes – and is stepping on the gas pedal to install new fibre connections to meet rising demand.