Safaricom says it will increase personalized SMS promotions to customers to slow the rate at which text messaging services are losing ground to chat apps like WhatsApp.
The telco, which controls roughly 90% of the SMS market, admits that the service’s popularity has been declining and expects the trend to continue.
Safaricom CEO Peter Ndegwa stated that the telco will begin engaging customers more for the SMSs offered to customers to resonate with their lifestyles rather than a one-size-fits-all approach.
“On the SMS side, we’ve also begun to see that we need to engage customers so that they have a holistic offering based on their lifestyle, particularly high-value customers,” he said.
According to the most recent Communications Authority of Kenya (CA) data for the three months ending September 2021, local SMS traffic via Safaricom was 8.66 million, a 44% decrease from 15.99 million in the same period last year.
Safaricom earned Sh5.87 billion in messaging revenue in the half-year ended September 2021, an 18.3% decrease from the previous comparable period, as the average revenue per user fell to Sh44.68 from Sh55.95.
Despite the growing preference for messaging apps such as WhatsApp, Messenger, and Telegram, particularly among younger customers, the company says it is not abandoning the service.
“The drop in domestic SMS traffic was attributed to a lack of SMS promotions and special offers during the reference period, as well as the continued preference for OTT services over SMS,” CA explained.
“It’s fair to say that this will be a declining trend, but I don’t think it’s to the point where we’ll give up.” “No, we are not,” Mr. Pal stated.
“We believe that with the right level of engagement, customers will use more, and we can maintain a relatively stable revenue line, albeit on a declining trend.”