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SAP Africa picks interim managers

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Tuesday, Jul 25th

‘Poorer Kenyans over spending on mobile phones’

Poorer Kenyans over spending on mobile phones.

Low income Kenyans are forgoing important expenses to purchase prepaid mobile airtime while they are also paying more for telecom services than their postpaid counterparts.

This is according to experts speaking at a World Consumer Rights Day event held in Nairobi on Friday.

Speaking at the event, Youth Education Network programme assistant, Pauline Nderi, claimed that low income earners, otherwise referred to as the ‘base of the pyramid’, are over-spending on mobile services.

"Majority of the poor Kenyans actually use prepaid services as they load cheaper credit where they spend more than those people who are on postpaid services," said Nderi.

Nderi explained that a low-income Kenyan could spend an average of Ksh 50 on a daily basis, amounting to Ksh 1,500 per month. This in turn is Ksh 500 more than the basic postpaid service on offer from most operators, said Nderi.

Speaking to ITWeb Africa, Dorothy Mwikali, a financial advisory expert at investments firm Baobab Capital said, "Most of those on pre-pay services either do not know the advantages of post-pay plans, or simply do not have the cash to pay for their monthly subscriptions in one payment."

Mwikali said that also telling low-income earners to pay Kshs 1,000 for mobile postpaid subscription will not make economic sense to them either.

But Mwikali urged consumer bodies such as the Consumer Federation of Kenya to be on the forefront in educating subscribers on available subscription plans and to help them save money in the long run.

"Mobile companies will not do that for us, as they are in the business of maximising profits. It's only by empowering subscribers with the power of knowledge, will this country be able to move forward economically," Mwikali said in conclusion.

Kenya has become one of the biggest mobile markets in Africa, with the number of connections surging to 31.3 million, according to the Communications Commission of Kenya (CCK).

Unbanked Kenyans have also turned to mobile money in their millions, as the CCK says over 25 million people in the country use these cash transfer services.

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