An Analysis of the Kenyan Mobile Phone Market

An Analysis of the Kenyan Mobile Phone Market

Author :Kevin Singh

CONTENTS

QUESTION1: ANALYSIS OF THE KENYAN MOBILE PHONE MARKET 3
1.1COMPETITION 3
1.2 TECHNOLOGY 4
1.3 FOREIGN TRADE POLICY 5
1.4 ECONOMY 7

QUESTION 2: SUCCESS OF SAFARICOM AND LESSONS FOR OTHER FOREIGN MOBILE PHONE CARTELS AND VENDORS 8
2.1PEOPLE 8
2.2 PRODUCTS 9
2.3 CUSTOMER SERVICE 9
2.4 CONTINUOUS IMPROVEMENT 9
2.5 SOCIAL INVESTMENT 9
2.6 CONCLUSION 10

QUESTION 3 11

3.1 THE LIKELIHOOD OF SAFARICOM LOSING COMPETITIVE ADVANTAGE BY NOT CUSTOMIZING PRODUCTS 11

3.2THE STRATEGY THAT SAFARICOM NEEDS TO ADOPT TO CUSTOMIZE ITS PRODUCTS FOR THE LOCAL KENYAN MOBILE PHONE MARKET 12
3.2.1Affordability 12
3.2.2Market Research 13
3.2.3 Value Adding Services 14
3.2.4 Customer Relationship Management 14

Q4: HOW SAFARICOM TURNED THE POOR INTO ENTREPRENEURS AND VALUE CONSCIOUS CONSUMERS 15

REFERENCES 18

Question1: Analysis of the Kenyan Mobile Phone Market

1.1Competition

Traditionally research by the Massachusetts Institute of Technology (MIT), (2008), indicates that, “[the number of ] subscribers in developing countries… now represent (s) the majority of 2.4 billion mobile phone users worldwide”.

The Kenyan mobile phone market is no exception and has been described as being one of the fastest growing industries in Kenya (Karobia, C, (2006)). Since competition is usually related to the supply and demand of products, the following graph is presented:

Figure1: Fixed Line Subscribers versus Mobile Phone Subscribers (Source: MIT 2008)

Figure 1 shows that from 1994 until 2004 the number of fixed line subscribers has been fairly constant with very little growth. The number of mobile phone subscribers however has exponentially grown from early 1998 until 2004. According to statistics from MIT (2008) prior to June 1999, Kenya had 15000 mobile phone subscribers and by the end of 2004, the number of subscribers had grown to 3.4 million. Just 18 months later at

References: Author Unknown, 2006, Safaricom’s Success, Accessed Online from http://bankelele.blogspot.com/2006/08/safaricom-success.html Author, Unknown (2008), Safaricom Likely to Retain Lead, Saturday Nation, Accessed online from :http://www.nation.co.ke/News/ Hills, C(2007), International Business, 7th Edition, McGraw-Hill Irwin, New York. Karobia, C, (2006), Kenya mobile firms seek roaming advantage, BBC News, Accessed online from www.bbc.co.uk Kotler , P and Keller , K.L,(2006),”Marketing Management” ,12th Edition, Pearson Education , Inc., Upper Saddle River, New Jersey Laudon KC and Laudon JP, (2006),Managing the Digital Firm ,9th Edition. Upper Saddle River, New Jersey. Lehr, D, 2005, Cell Phone use changes life in Africa, Associated Press, Accessed Online from http://fellows.rdvp.org/davidlehr Prause,Stephanie,(October 2006), “True Value of Market Research”(online),NZB. Available from :http://www.nzbusiness.co.nz Schiller, R , 2006, Economy Today, 10th Edition, McGraw-Hill Irwin, New York. Van Vuuren, H , 2002, Corruption, Perception and Foreign Direct Investment-Counting the cost of graft”, Vol 11 No 3, Published in the African Security Review. Wagacha, M, 2008, Kenya’s Trade Policies: Mainstreaming Strategies In National Development,Optimum International (ORI).