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Telecom firms battle for high-end smart phone market

01 December 2014, 09:46

Nairobi - Telecom companies in Kenya have stepped up the fight for the lucrative high-end smart phone market.

The companies are offering various incentives that include free insurance to buyers in a bid to win them over. So fierce is the competition that buyers are spoilt for choice because of various incentives offered.

The rivalry is between the East African nation's biggest mobile phone service providers Safaricom and Airtel. The firms are currently fighting for the iPhone 6 and iPhone 6+ market.

The trendy gadgets were launched in the country about two weeks ago, and globally over a month. The companies are selling the devices at between 955 U.S. dollars and 1,177 dollars. The firms' price difference on every gadget is 11.1 dollars. However, that is as far as the price war goes, the real battle is on the value additions.

While Safaricom is offering on one of the gadgets free data of 1.5 gigabyte (GB) per month for three months, Airtel is giving out 9GB for the same period (3GB per month).

On another of the devices, Airtel is offering free 4GB data a month for three months while Safaricom is giving out 4.5GB during the entire period.

Airtel spices the deal further by offering users of the gadgets, which are the most-expensive smart phones in the East African nation currently, two years free insurance.

Theft of smart phones is rampant in Kenya, making insurance firms come up with products tailor-made for the gadgets. Airtel is thus using this incentive to lure buyers of the gadget, mainly top executives, to its side.

It is not the first time the companies are engaging in such fierce battle for the high-end smart phone market. When the Samsung Galaxy S5 was unveiled in the East African nation, the companies fought for customers using similar incentives.

Uptake and demand for the expensive smart phones has been on the rise in Kenya in the past months, with various manufacturers including Tecno, LG, Samsung and Nokia competing to launch their gadgets.

Also read: Airtel to offer insurance cover for iPhone 6 and iPhone 6 Plus

And in what shows how lucrative the market has become, most of the high-end gadgets are pre-ordered, with most of those buying the expensive gadgets being professionals and top executives working for various companies in the East African nation.

In some cases, some companies team up with the telecom firms so that the employees can buy and pay for the devices in instalments.

"If you look at the Kenyan market, time when one would buy smart phones without value additions is fast-fading. Even the budget smart phones come with incentives," said Bernard Mwaso of Edell IT Solutions in Nairobi, noting that the telecom firms recover their money from data and airtime revenues.

"It may look like consumers are getting more than they deserve, but the firms benefit in the long-term. They are in business and certainly must recoup return on their investment," he added.

The good thing with the fierce rivalry, according to Mwaso, is that consumers benefit not only from the incentives but also from affordable prices and quality gadgets. Two thirds of all mobile phones sold in Kenya currently are smart phones.

- Xinhua


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