Challenges and competitive strategies adopted by mobile phone companies in Kenya

Abstract

The main objective of this study was to determine the competitive challenges and strategies adopted by mobile phone companies in Kenya. The mobile or cellular phone service industry is an industry that is heavily dependent on information and communication technology (lCT). This is an area that is very dynamic with new innovations every moment. To survive, in the industry, cellular mobile phone service providers have to keep up with the rapid pace of development. The wide use of cellular phones in social networking and the development of smart phones with superior computing and multimedia capabilities are some of the challenge that prompt them to continuously upgrade their network capacities and capability.

Not left out is the new class of mobile users, the youth who have other uses of the mobile phone other than voice communication. The uses include online gaming, video and teleconferencing, audio and video upload and download, asset tracking, ring tones and screensavers, voice mail storage, corporate network. support and backbone provision, cloud computing etc, are some of the services other than the basic voice service that the mobile phone service providers have to keep up with. The initial population of study was the first three (3) cellular mobile telephone service providers registered in Kenya namely: Safaricom Kenya Limited, Airtel Networks Kenya Limited, Telkom Kenya Limited (Orange) but the process of data collection was caught up with the licensing of a fourth provider Essar Telecom Kenya Limited (Yu) hence the population increased to four from the initial three.

The study data was collected using questionnaires containing both structured and unstructured questions. The respondents were middle and senior managers in the Human Resource, Technology, Finance and Marketing departments. A questionnaire guide was used where telephone and personal interviews were conducted. The study findings show that all the four cellular mobile telephone companies have a formal mission and vision statement. They all employ competitive strategies of cost leadership, differentiation and focus though these are applied to different degrees. Cost leadership strategy is the most used by all the firms. Differentiation strategy is also used while Focus is marginally used except for one finn. The study focused only on the cellular mobile telephone companies registered in Kenya leaving out substitute products like satellite phone service providers, wired telephone service providers and unlicensed mobile phone companies using roaming facilities. In conclusion, the findings show that the cellular mobile phone industry is very competitive and dynamic. To survive, a company has to be very innovative and up to date with technology so as to provide all the services reliably and at lowest cost.