Vuka Verdict:
Zain introduced the Vuka revolutionary flat rate call package of 8 shilling per ($0.10) minute to call all other networks in October 2008. After an initial surge in customers. What do the numbers bear out?
Rough dialing
- Zain gained a million customers 3.08 million (up from 2.1 million)
- Zain lost revenue $162 million (~13 billion) down from $194 million
- Zain lost big money: Net loss was $90 million in 2008 compared to a loss of $21 million in 2006. the ~Kshs. 7.2 billion is perhaps the largest corporate loss in Kenya for a single year
Zain outlook
- The 2009 numbers should be much better as marketing costs of Zain’s Vuka were quite heavy for the last quarter of 2008 and by which time customer numbers were still growing. But with just 5% of the entire Zain group customers, Kenya may be an expensive group to manage in what they consider to be a competitive market with low revenues [Average revenue per user/ARPU was $6 (down from $7)]. Zain claims 18% market share to Safaricom’s 77% and 5% for Orange
- Zain owned 80% of the Kenyan operation, up from 70% in 2007
- If Zain can state the population of Kenya is 38.5 million (up from 37.5 in 2007), is there need for an expensive Government census which will take place later this year?
