Tuesday, March 17, 2009

Zain in Kenya

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?

13 comments:

Crystal balls said...

When Zain are calculating their market share, do they consider all lines purchased or just active lines? Coz they are quite prompt in disconnection. And, incidentally, do they resell the disconnected lines or redistribute the disconnected numbers?

coldtusker said...

I like the new colours!

I think the heavy acquisition costs in 2008 included Vuka, 65/- plan, Club 20 with voice & Zain re-branding. They should do better in 2009.

greamhouze said...

This is to say Michael Joseph was right when he said they dont have to cut their rates to the levels of their competitor because there are profits to be made. Zain and its fans look optimistic all I can say is good luck to them. Just dont play under hand hard ball just to look good. Look good and be good.

PKW said...

Too much going on for Zain, opefully they can sit back and reap this year.
The 1 million new customers; I wonder if that includes the new Zain SIM card buyers who keep their old safcom numbers? The vuka tarriff should have effectively killed the need to keep one's safcom line, but it's gonna be hard until people can move and get to keep their numbers-talk of immobile mobile phone numbers.

omondi9@yahoo.co.uk said...

Dear Zain,

I am a freelancer who has been in the Market with you for about six months.I hereby suggest that with Vuka tariff its a wonderful world but also i therefore suggest that let you introduce offpeak hours one flat rate across all networks to enable the revenue increase at night.
Collins Agina
0733670124

Louis said...

check out this article on ft
http://www.ft.com/cms/s/0/1e2021c8-120e-11de-b816-0000779fd2ac.html

Anonymous said...

I think their market share is genuine since the numbers which are not active are counted. 2009 will be good for Zain with ZAP in place.

Anonymous said...

ZAIN HAS IMPROVED ALOT AND WITH 10 FRIENDS NUMBERS...I SEE 2009 INCOME IMPROVING.

Anonymous said...

i like to know more about kenya

pink m said...

Moving permanently to Zain post paid, and registering for Zap. They have good products, their marketing seems to have improved, and with the failings in Safaricom, they will post better numbers this year for sure. Ditching safcon at last.

Peter Njenga said...

I am positive that Zain will perform better in 2009.
Their rebranding exercise in 2008 and the introduction of new products e.g. Vuka Tariff definitely cost them much.
Let's wait and see how 2009 turns out for Zain.

Anonymous said...

What about the market share of YU? i have heard its very small.

Leo Faya said...

Bankele... Good post.. how about changing the Background color of the site to white.. black sorta hurts eyes if we stare on the page for hours reading the detailed input...

Just a suggestion...

In other news.. the SAFCOM brand perception has changed amongst the Youth (not as vibrant as it used to be) - they have larger Market share but the number of SIM holders between SAFCOM and ZAIN is almost going to balance out this year... (sim holders not necessarily active subscribers). SAFCOM is especially worried about ZAIN because if they stay consistent and change slightly many will start utilizing their ZAIN simcards more than SAFCOM...

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