When it comes to entertainment, home internet as an essential utility for most Kenyans who prefer speed, reliability, and service.
This is according to poa! Internet survey conducted in August this year which found out that Kenyan consumers shy away from funding grand HQs and big entertainment budgets for Internet providers.
According to the survey, internet consumers would rather get high-quality technical services from providers than pay extra for large marketing, entertainment and headquarter budgets, prior to the new round of subscription price rises from the country’s leading providers.
- Safaricom increases cost for voice calls and data by 30 cents, SMS 10 cents
- Telkom, Airtel Subscribers to pay more for voice calls and data
More than four out of five respondents to the social media poll in August 2018 said they did not want to cover the cost of lavish headquarters, executive entertainment, or hefty marketing budgets in their own internet subscription.
“The association that Kenyan consumers typically have between high price and high quality is still there – as we saw in our poll from the 17 per cent who wanted to cover the extra HQ and marketing costs in their Internet subscription. But it is breaking down, as customers move to the view home internet as an essential utility and seek only speed, reliability and service, without paying a premium for a grand brand,” said Andy Halsall, CEO of poa! Internet.
For the larger brands offering premium price home connections, hefty brand and glamour budgets are typically adding several hundred shillings a month to customers’ internet bills.
“For our largest providers, the cost of dedicated prime-location headquarters and billboards country-wide must necessarily then be built into the prices they charge for their internet, and such advertising isn’t cheap. Each billboard costs in excess of KSh70,000 a month, while print advertising is typically close to a half million shillings for one page for one day,” said Andy.
Sterling Capital, Kenyan stockbroker in their report Fixed Data – “The New Growth Frontier” state that they @Do not anticipate price wars in the fixed data business in the short term.” “Attempts by competitors to reduce fixed data tariffs would depress margins further especially as most players continue to see a decline in subscriber numbers.”
Read: Safaricom unveils new home fibre packages inclusive of data, calls and home insurance
They conclude that:
We forecast 30% growth in fixed data service revenue to KES.8.7Bn FY2018/19 and 25% growth FY2019/20 to KES.10.8Bn on account of increased subscriber numbers.
Fixed data contribution to total service revenue FY2018/19 and FY2019/20 forecasted at 3.6% and 4.2% respectively.