Safaricom Plc – Mobile Data - “Losing its byte” - November 2018
• Mobile Data “Losing its byte” is the 4th part of our 6 part series report titled “Is Safaricom losing its grip?”
• In the 1st part - “Pricing Power Explained” we explained the concept of “pricing power” which we defined as the ability of a company to raise prices over time without reducing demand for its products.
• We used the Herfindahl Hirschman Index (HHI) theoretical framework to determine each business line’s concentration levels and mentioned in brief the services in which Safaricom has or does not have pricing power.
• The HHI Index for mobile data has been on the decline over the last one year as a result of competitive threats.
• From our tariff analysis we observe that Safaricom is the most expensive mobile data provider and this has a negative impact on its market share.
• The report concludes that Safaricom does not have pricing power in the mobile data business as mobile data customers are highly price sensitive.
• In spite of loss of market share, we expect data service revenues to increase but at a declining rate, a trend that will force Safaricom to devise strategies aimed at countering the trend. Download Report