Safaricom launches commercial 5G trial in Kenya. Can Kenyans afford it?
Following the issuance of one-year 5G test and trial licenses in March 2020 by the Kenyan regulator to five mobile operators, telco Safaricom launched 5G commercial trials for consumers and businesses on March 26, 2021. The launch in partnership with both Nokia and Huawei centres on the capital Nairobi and includes Kisumu, Kisii, and Kakamega.
Being the first operator to offer 5G technology in Kenya, will provide Safaricom with an opportunity to differentiate itself from its competitors. Safaricom can use its position as the only operator offering 5G technology to promote an unrivaled 5G value proposition, initially in mobile and potentially in the future.
As Safaricom deploys its 5G network, data plans are expected to be much more expensive compared to 4G, raising the question of affordability for over 38 million subscribers in Kenya. For example, Safaricom’s 1GB monthly data costs $0.9, which is less than MTN’s $9.97 tariff for the same amount of data in South Africa. However, Kenya’s minimum monthly wage is $123.61 compared to $1,045 in South Africa. It seems only a small percentage of Safaricom’s subscribers will be able to afford the company’s upcoming 5G data tariffs.
Furthermore, only a few smartphones in Kenya are equipped with a 5G chip, and subscribers must purchase these high-end devices in order to take advantage of the high-speed network. This sounds like a burden that a majority of Kenyans might not be able to carry. I believe we will see this rollout enthusiastically taken up by the country’s high income earners in the immediate short term, leaving out the majority of Kenyan’s low income earners to rely on their current services until economies of scale push prices down.