Afcacia

The number of mobile phones owned by Kenyans in the six months ended December 2022 went up by 3.78 million compared to the same period a year earlier. The rise in new phone purchases comes despite implementation of excise tax that pushed up the cost of the devices.

Data from Communications Authority (CA), the sector regulator, indicates that 63.36 million mobile phones were in use in the period, a 6.3 percent jump from 59.58 million in the six months ended December 2021.

It was expected that the introduction of a 10 percent excise tax on all imported mobile phones from July 1 would dampen purchase as the2022 a levy that made the phones more expensive.

“The trend indicates an increasing demand and uptake of smart phones mainly driven by demand for broadband-enabled services and accessibility to the devices,” CA says in the report.

Smartphones accounted for more than 90 percent of the increase as the number of mobile phones went upe to 29.74 million at the end of December last year, compared to 26.51 million during a corresponding period a year earlier.

Feature phones that are popular with the low-income economic band increased marginally to 33.61 million from 33.06 million in the previous year.

The Treasury imposed a 10 percent excise tax for every mobile phone imported from July 1 last year, and consumers have had to bear part of the burden in terms of increased costs.

SIM cards also went up from July last year following the imposition of a tax of Sh50 for every imported ready-to-use SIM cards, through the Finance Act 2022.

Safaricom said it would hike prices of imported mobile phones to reflect the tax changes, barely two weeks after the new tax took effect. The telco also added it would factor in a 25 percent import duty introduced that month as part of Common External Tariff.

A surge in demand for smartphones has led to a cut-throat competition as mobile phone manufacturers introduce new models with slight variations in phone specifications and prices in a bid to grow sales.

Telcos notably Safaricom also allow customers to buy smartphones through redemption of their loyalty points and cash top-ups, highlighting the smartphone craze in the country.

The telco also allows customers to buy smartphones through the Lipa Mdogo Mdogo initiative where they make daily payments of as low as Sh20.

Telkom Kenya –the third largest telco— in June last year introduced a mobile phone purchase deal that allows customers to buy the gadgets through hire purchase.

Smartphones have become a necessity for the middle-class, offering remote working platforms and enabling students especially in higher learning to study online.

The feature phone market continues to thrive albeit at a slower pace than smartphones mainly in the lower-income band and those in far-flung areas where network coverage is shaky.

Feature phones are also preferred for their long battery life and also offer an alternative for callers who are keen on not getting tapped by bugs that are common with smartphones.