Zain Considers Rural Market in Pursuit of Growth

Zain, a leading mobile phone service provider in Africa and the Middle East is following its success in Nigeria and Kenya where it plans to increase its investments this year in upgrading and expanding its networks to broaden its presence and market share in the rural areas.
The move is to capitalize on the considerable growth in its subscriber base and potentials in the rural areas, which are expected to become a pivotal market within Zain’s array of operations this year.
“On the back of excellent market response in 2008, we are looking forward to expand our network and introduce new value added services like the M-Banking solution this quarter,” said Rene Meza, managing director, Zain Kenya.
“We have experienced strong customer growth, especially with our Vuka Tariff and expect this trend to continue in 2009,” he added.
Speaking during the presentation of cash awards to the just concluded Jishindie Bonus Promotion in Nairobi, he noted that the Vuka tariff had led to a 50 per cent increase in its subscribers and a substantial growth in minutes.
Commenting on upcoming mobile telephoning companies, Meza said the companies would face stiff challenges this year as a result of the global economic crisis and Kenya would be no exemption.
“There is a severe drought in Kenya with 10 million people facing starvation, this combined with the global economic crisis, there will be less capital expansion projects as companies strive to stay afloat and maintain their customer base. It is a rough year and Kenyans will be debating either to buy food or airtime,” he stressed.
According to him, the cost of capital is very high, thereby a rough time for the new investors in the market, adding: “the new companies have a major challenge in setting up their network masts.”
On M-Baking, Meza said the company was ready to roll out in the next few months, noting that Zain was ready financially and technically and was only waiting for approval from the Central Bank of Kenya.