Three Strategic Drivers Behind Airtel Kenya’s Plan To Dominate The 5G Home Internet Market.

This past week I attended Airtel Kenya’s media event where they provided a raft of announcements around their 5G Internet business. I have been a huge fan of Airtel Kenya’s 5G offerings since they launched in July 2023 as I saw it even then as being highly disruptive to the status quo where Safaricom was and continues to be the only competing 5G mobile network in Kenya.

Airtel Kenya clearly took the 5G fight to Safaricom at launch by offering a 5G WiFi router that was less than half the price of what Safaricom had brought to the market months earlier. Secondly, the router actually came with a power bank which meant that for many users they could stay online for as long as 5 hours even if their electricity had gone down.

Lastly, the affordable home 5G data packages offered, though capped with daily data usage limits, allowed you to use the 5G network in an unrestricted manner so you could and can still get the full speed of 5G available on the network.

To put it simply, Airtel Kenya went big and aggressive as far as their 5G offerings are concerned and this has led them to take a big chunk of the market and even win customers from Safaricom. We also saw Safaricom respond last year by lowering the prices of their 5G WiFi routers to match Airtel Kenya’s and also offer 5G data packages that were clearly designed to match what Airtel Kenya had in the market.

Safaricom does NOT typically copy the competition since quite often customers simply pay the premium for what has usually been a better performing mobile network but in this instance you can tell Airtel Kenya must have been nipping at their heels and winning marketshare that compelled Safaricom to respond.

Therefore, in a market where Safaricom has been has been incredibly dominant, Airtel Kenya has been making massive strides as far as their 5G propositions are concerned during the close to one year since the service launched. That being said, when it comes to the home internet market throughout Kenya, the competitive landscape features formidable competition from Safaricom, Telkom Kenya, Faiba JTL, Zuku and even the emergence of Starlink in underserved areas.

Airtel Kenya’s strategic moves as shared this past week at the media event are crucial to gaining further market share — they clearly didn’t come to play, they came to win! So, here are the three significant and strategic drivers that could see Airtel Kenya not only increase its 5G home Internet market share but also capture segments from its competitors.

A Massive 5G WiFi Router Price Reduction.

One of the most impactful moves Airtel Kenya has made this past week is the dramatic reduction in the price of their 5G wireless WiFi router. The price has been slashed from KES 9,999.00 to KES 2,999.00, marking a substantial reduction of approximately 70%. This reduction significantly lowers the barriers to adoption, making it more accessible for a broader segment of the population.

Lowering the cost of entry for consumers is a proven strategy to boost adoption rates and market penetration. By making high-speed internet more affordable, Airtel Kenya is poised to attract a substantial number of new customers who previously may have found the costs prohibitive.

Let’s also not forget to mention that the router comes with power bank as well as part of the package. There is no doubt that this is a loss making adventure for Airtel Kenya as they must be subsidizing the true cost of the router to achieve this very accessible price point which will help close the digital divide throughout Kenya. Here are some additional details on this development.

Extensive 5G Network Expansion

Airtel Kenya has been aggressively expanding its 5G network across the country since it launched in July 2023. As of this wriring, they have launched 480 sites from December 2023 to June 2024 and plan to cover 94% of Kenya by the end of 2024.

This massive network expansion includes 1,000 sites across 46 counties, ensuring that even the most underserved areas gain access to high-speed internet. The current 5G coverage is over 85% across Kenya, with 35 counties now having 5G and over 1 million customers using the service. This milestone was achieved rapidly since the 5G network’s initial launch on 6th July 2023, with 372 sites. The detailed expansion to 16 counties and 180 wards by July 2023, and the projected 39 counties and 285 wards by June 2024, demonstrates Airtel’s commitment to broadening its reach.

Over 1,000 KM of fibre has been deployed to support the 5G network rollout. Currently, Airtel Kenya is turning on three 5G BTS (Base Transceiver Stations) every day at the current expansion pace which is clearly impressive! This extensive coverage will not only challenge Safaricom’s Internet dominance but also provide Airtel Kenya with a significant foothold in frontier markets, where reliable internet connectivity has been scarce.

In a war-like scenario, this strategy is known as ‘flanking’ where you surround the enemy by going where they are not present and eventually you attack them with no room for escape. Airtel Kenya want to win the markets where there is no 5G presence and in the process become the default option for consumers in those markets. Here are more tactical details on how Airtel Kenya has been aggressively expanding their 5G network to date:

In addition, see below the impressive 5G network coverage that Airtel Kenya intends to achieve across the majority of counties in Kenya going forward:

The Introduction of Home Unlimited 5G Data Plans

For the first time, Airtel Kenya has introduced unlimited data packages for the home Internet user market, albeit with fair usage policies (FUP). The home unlimited data plans are structured to cater to different connectivity needs with options of 10 Mbps at KES 3,500, 20 Mbps at KES 5,000, and 30 Mbps at KES 6,500.

While the FUP means data speeds are capped after certain usage thresholds (1 TB for 10 Mbps, 1.5 TB for 20 Mbps, and 3 TB for 30 Mbps), this offering is still a game-changer. Previously, unlimited plans were mostly available to business users.

By extending these to home users, Airtel Kenya is tapping into a market segment that is increasingly demanding more data for remote work, online learning, gaming and streaming services. This move is likely to attract customers who are looking for stable and predictable internet costs, providing Airtel Kenya with a competitive edge. See full details in the table below:

Conclusion

Airtel Kenya’s strategic initiatives for their 5G network spanning significant price reductions, extensive network expansion, and the introduction of home unlimited data plan are all key to further disrupting the Internet market in Kenya.

By lowering the cost of adoption, expanding into underserved areas, and providing attractive data plans, Airtel Kenya is not only set to increase its market share but also to challenge the dominance of established players like Safaricom.