Safaricom puts 5G rollout on hold
Tuesday January 05 2021
Kenya’s mobile phone operator Safaricom has suspended plans for the launch of the fifth-generation (5G) mobile internet service.
Last week, Safaricom Chief Executive Peter Ndegwa reportedly said there is no plan to launch the 5G network in the short-term and that the telco’s immediate plan is to convert millions of 2G and 3G users to 4G.
Safaricom had completed testing and trial of the 5G superfast internet service and planned to switch major urban centres to the service before end of 2020.
In February, the then acting CEO Michael Joseph said the firm had completed testing and trials for the upgraded network as the company seeks to capitalise on burgeoning mobile Internet use in the country.
Kenya’s Safaricom 5G network was being built by the Chinese firm Huawei Technologies.
Safaricom is aiming to increase its data business to offset sluggish growth in mobile calls, where it has seen a small revenue growth due to saturation, forcing the firm to turn to M-Pesa and Internet to power growth.
The 5G commercial launch would have followed the December 2015 unveiling of the 4G network, which has helped the firm grow its revenues from data to Ksh40.7 billion ($370 million) at the end of March from Ksh9.3 billion ($84.54 million) in 2014.
According to The Economist, the US government, on May 15, announced a startling escalation in its campaign against Huawei, a Chinese company — the largest provider of telecom equipment in the world. The US has since 2012 expressed concerns that mobile networks that rely on Huawei could allow espionage and sabotage by China.
In 2019, Huawei became the second-largest global seller of smartphones, surpassing Apple, Inc for the first time and coming behind number one Samsung Electronics Co. Inc. Huawei was founded in 1987 by a former officer of the Chinese People's Liberation Army and the company has grown into a technology giant selling millions of smartphones annually, with help from its ties to the Chinese government. As a result, several countries around the world led by the US have become concerned that the telco may use its technology to spy on customers.
In May 2020, President Donald Trump issued an executive order banning all US companies from utilising information and communications technology from any party considered a national security threat.
Last year, Safaricom launched a Ksh20 ($0.18) a day 4G smartphone package aimed at empowering customers currently on 2G devices to upgrade and enjoy high-speed Internet connectivity. The new campaign seeks to empower an extra one million customers to upgrade to 4G enabled devices in the 2020/2021 financial year.
Safaricom is 35 percent owned by South Africa’s largest mobile phone operator Vodacom and the government of Kenya which owns a similar stake. British Vodafone owns five per cent of the shares while the remaining 25 percent are held by individual and institutional investors.
Kenya and the US formally launched negotiations on July 8, for a bilateral trade pact that the two economies hope could serve as a model for additional agreements across Africa.