This research report was prepared by the Research Department of Old Mutual Securities Limited. Old Mutual Securities Limited is a securities trading company licensed by the Capital Markets Authority (Kenya) for the purpose of facilitating trade on the Nairobi Securities Exchange.

Here are our views on the news making headlines today for Kenya:
Equity to start distributing one million more Equitel SIM cards. Subscriber’s number grew up from 209,554 subscribers in March 2014 to reach 665,661 subscribers in March 2015. The bank did not, however, indicate the current figure of subscribers but there was speculation it had gone beyond the one million mark by the time it was applying for the new prefixes from the CA.

Our View: Though this portends well for the Group, the launch of the Equitel is long overdue and it continues to face some challenges with 6 litigations having launched against it by the competition. If the magnitude of the bank’s entry into the Mobile Virtual Network Operator (MVNO) market came with a bang, it would have brought in a force that could have diluted the dominance witnessed in mobile money market over a long period and the expectations of a turning point in the telecommunications industry in Kenya after the bank’s entry into the MVNO market have been watered down by the successful partnerships between Safaricom and both KCB Group and Commercial Bank of Africa (CBA).We see the future of MVNOs in the online payment of goods and services, a space which is currently dominated by EMV.
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