Africa Business Communities

Safaricom to build own fibre network

Safaricom has announced plans to build its own inland fibre optic network to get a larger share of the data market and reduce its reliance on the voice market that is faced with increased competition and shrinking margins. The firm Tuesday started the search for company that will build and maintain the inland network that is expected to cost nearly KES1bn to lay across the country.

This will support its new data offering including data storage, internet security services and sell of software to third parties, which has prompted the mobile telephony firm to build its own fibre network instead of leasing. It also plans to lease excess fibre capacity to the government and companies such as banks and Internet Service Providers (ISPs) putting it in head- to- head battle with its partner Jamii Telecom, Kenya Data Networks and Access Kenya.

“This is in support of our strategic direction to be the regional leader in broadband provision; the new direction will give us greater control of the quality of service offered to our customers, said Mr Bob Collymore in an interview with the Business Daily Tuesday. S

afaricom has seen the bedrock of its business—voice traffic that accounts for 67 per cent of its revenues—shaken to the core by the halving of calling rates since last August, and is now looking at the data business to maintain its profitability. Safaricom reported KES13.1bn in net profits in March, a 13.2 per cent drop from KES15.1bn the previous year.

Analysts and investors will this afternoon look for signals on whether the firm will reverse the drop profits for the year ended next March as Safaricom unveils it half year results. Its share has shed 24 per cent in the past in the past month to the current three shillings a piece. Besides data, the firm is looking at the recent increase in calling tariffs by between 25 and 30 per cent to boost its second half performance. Safaricom will be following in the footsteps of rival Telkom Kenya in building its own inland fibre optic as mobile telephony firms increasingly look at the data market for growth.

 

www.safaricom.co.ke

 

This article was originally posted on Africa ICT & Telecom Network


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