Safaricom launches Kenya's first 4G service

Base station. (Duncan Alfreds, Fin24)
Base station. (Duncan Alfreds, Fin24)

Nairobi - Safaricom launched Kenya's first fourth-generation (4G) internet services on Thursday, seeking to capitalise on burgeoning mobile Internet use in the country.

The government of the east African nation of 40 million people wants the use of 4G high-speed broadband network to help raise the internet's contribution to economic growth to 10% in 2017 from about 3% this year.

Safaricom - Kenya's largest telecoms phone firm - saw web data revenue rise by more than half in the six months to September. The 4G service is a central part of its attempts to further expand its data business to counter slower growth in voice calls revenue.

The operator, which is 40% owned by Britain's Vodafone, signed a 15bn shilling ($166m) deal with the government last month to build a national security and surveillance system, and was offered the chance to buy the 4G radio spectrum - or frequencies - as part of the agreement.

Safaricom Chief Executive Bob Collymore said the company paid $75m for the spectrum and would roll out the 4G service countrywide within 36 months.

Kenya had more than 32 million mobile subscribers in the quarter ended June, representing a penetration of about 80% of the population. Of those users, around 14 million had mobile data subscriptions.

Safaricom's first-half pretax profit rose by almost a third to 21.1bn shillings due partly to growth in data usage, offsetting sluggish voice revenues.

The company's need for extra capacity was shown by its joint bid with Bharti Airtel for the assets of Essar's Yu in April. The deal, which gave Safaricom Yu's spectrum and infrastructure, was cleared by regulators in November.

Collymore said Safaricom had paid $82 million for Essar's infrastructure and spectrum.

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