The Computer Society of Kenya

Since 1986

telkom2BUSINESS DAILY By MARK OKUTTAH

Friday October 31,2014

Employment in telecoms industry has hit a peak after mobile companies resumed hiring following the end of a vicious price war that started in 2010.

Data released by the Communications Authority of Kenya (CA) indicate that the mobile phone units of Safaricom, Orange Kenya, yuMobile and Airtel employed 6,439 workers in the year to June, up from 5,617 last year.

At 6,439 workers, the firms’ staff count has surpassed the 2010 level of 5,869 when a vicious price war initiated by Airtel halved tariffs, prompting the telcos to go slow on hiring.

This is the first year that the employment numbers have jumped by the highest margin of 822 since the authority begun disclosing the job data six years ago.

“As at the end of June 2014, the level of employment for both males and females in the mobile industry grew considerably,” read part of the agency’s quarterly sector statistics report released on Thursday.

Analysts say the tariff increments affected in late 2012 and the falling call termination costs — the fee operators pay rival firms for handling their calls — over the past three years have brightened the outlook for the operators.

The period under the previous CA review saw Essar, the operator of the yuMobile brand, scrap free calls offer within its network while Airtel increased tariffs by a third to Sh4.02.

They followed Safaricom that raised call charges in October 2011 by a third to boost sales.

The tariff adjustments have not affected airtime use because all the operators recorded rise in traffic with the revenues increasing 5.2 per cent to Sh140 billion last year.

Mobile phone users consumed 30.4 billion minutes of airtime in the year to June, up from 28.8 billion in 2013.

A price war sparked by Airtel in August 2010 cut airtime charges by half to an average of Sh3 per minute and eroded investor confidence.

This saw the operators cut their staff count from 5,869 workers in 2010 to 5,542 in 2012 as they turned to outsourcing to lower wage bill burden.
But they were back in the hiring mood last year when they added 75 employees — the first rise in three years.

But Safaricom remained the dominant operator with 85.5 per cent of the airtime revenues, Airtel had 7.4 per cent, Orange Kenya (five per cent) and yu (2.1 per cent). Essar is exiting the Kenyan market in a deal that would see Airtel and Safaricom share its assets.

Orange doubled its airtime usage to 918 million minutes during the period from 401 while Airtel and yuMobile were the only operators to report a decline on their minutes of usage.

“The top-up bonus promotion by Telkom Kenya (Orange) during the period boosted its overall voice traffic during the period….. Subsequently, its market share by voice traffic grew by 0.2 per cent to reach 4.0 per cent up from 3.1 per cent recorded last quarter,” the report noted.

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