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Wananchi contemplates Kenya exit as competition heats up

Wananchi contemplates Kenya exit as competition heats up

Zuku Internet's parent company Wananchi Group could be exiting the Kenyan market according to a Bloomberg report, as mobile telecom companies eat up its broadband market share.

The report says that shareholders in the company, Liberty Global, Altice Europe NV and Helios Investment Partners are keen to sell their shares.

There has been no rebuttal from the company.

Three years ago, the Wananchi Group controlled the broadband market through their fibre product, Zuku Internet, and its dominance stood at 46.8%. However, the market has shifted with Safaricom, Airtel Kenya and Telkom Kenya having also introduced mobile broadband products.

Wananchi's market share now stands at 30% with 112,000 users, according to the latest sector quarterly report by the Communication Authority (CA) for Q4 of 2017/2018.

Although Wananchi is still a market leader, the deployment of 4G sites by mobile telcos and aggressive Fibre to the Home (FTTH) product by Safaricom, might rob it of its lead.

Safaricom's latest full year results, released in May 2018, say that its FTTH has passed 141,000 homes. According to the CA, Safaricom has 78,000 fibre users with 21.2 market share.

In totality, the CA report shows a sharp increase in broadband and internet adoption in the country in one year.

According to the report, high speed fibre subscriptions grew from 54,700 last year to 135,964 this fiscal year. "Subscriptions posted last year driven by high demand for high video definition streaming and increased competition among service providers," the report denoted.

Fixed wireless data subscription also grew three-fold to register 122,037 subscriptions from 47,231 during the previous fiscal year. "This is mainly attributed to the increasing demand for availing Wi-Fi services for public users especially in public institutions and corporate," it said.

"Satellite subscriptions have also increased significantly since the last fiscal year and this is attributed to the USF School Broadband Connectivity project by the Authority which rides on satellite technology and has so far connected over 800 public secondary schools in 2017/18 financial year," the report added.

Total broadband subscriptions (fibre, fixed wireless and mobile internet) registered 20.5 million subscriptions compared to 15.4 million last year, representing 33.1% growth.

Mobile internet still registered 99% of the subscriptions.

Broadband penetration was 43.9% in the quarter, according to the report.

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