mchambawima1
JF-Expert Member
- Oct 16, 2014
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Telecommunications companies are working on new revenue streams in the wake of social media that is eating into earnings from voice service.
The three mobile phone service providers -MTN, Tigo and Airtel - are focusing on new products to tap into the increased use of social media, which are eating into their earnings.
It has emerged that subscribers have turned to social media platforms for communication, eating into income from voice services.
Use of WhatsApp, Facebook, Skype, Viber is said to have sent a warning to the telecoms of possibility of a decline in voice revenue in future if new products are no developed.
According to the August monetary policy and financial stability statement, total sales in posts and communications sector in second quarter declined by 43.5 per cent compared with an increase of 101.1 per cent recorded over the same period last year.
MTN, the biggest player in the telecom industry by market share, introduced the daily Supa packs, to encourage a cross-network calls among its customers. The product allows its customers to call Tigo and Airtel customers at reduced tariffs.
Mobile money
The telecoms are also currently working on a common platform to encourage use sending and receiving money across their networks.
"We are working on integrating the existing money transfer platforms across the different telecoms. We are still in the initial stages, at the moment we are agreeing on the technical specs" said Norman Munyampundu, general manager of business MTN Rwanda.
"We are still in discussions on how it will work, the goal is to enable easy transfer of money to improve customer service across all the telcos.
"We envision increased transactions across all telecom companies," he added.
Over the past three years, mobile money subscription has grown steadily. In June 2013, the market had 2,048,260 mobile money subscribers, before growing to 3,826,997 and 6,763,467 in June 2014 and June 2015 respectively.
The statement further shows that between January 2014 and June 2015, mobile money transactions grew from Rwf260,702 million to Rwf572,051 million, a 119 per cent growth.
To leverage earnings, the telcos have also developed mobile money transfer products in conjunction with banks to ease financial transactions.
"The realisation came form what was happening to the industry. We had to find out what our customers need and go out to give it to them," said Tongai Maramba, the chief executive of Tigo Rwanda.
"We had to move towards a digital positioning, you need to understand that Internet is a big opportunity. We need to understand what this means to the industry," he said.
According to data from Rwanda Utilities Regulatory Authority (Rura), mobile subscriptions increased from 7,913,986 recorded in the first quarter of this year to 8,181,993 in June, registering a 3 per cent growth.
Mobile telephone penetration rate rose to 72.6 per cent compared with 72.3 per cent recorded at the end of the previous quarter.
The increase has been mainly attributed to Burundian refugees, promotional tariffs, popularity of mobile-based applications such as social media and financial applications.
Fixed telephone subscriptions in this quarter fell by 5.3 per cent from 48,931 recorded in the first quarter to 46,465 recorded in June.
Source: The East African
