Kenya's Safaricom loses 1.6 percent users' market share in second quarter

NAIROBI (Reuters) - Kenya's Safaricom lost 1.6 percent of its telecom subscribers' market share in the quarter ended June, the industry regulator said, marking the third straight quarterly drop for the country's biggest operator.

The firm, part-owned by South Africa's Vodacom and Britain's Vodafone, had 29.7 million subscribers during the period, data from the regulator Communications Authority (CA) seen by Reuters on Monday showed.

While the users' base was up 0.7 percent from the previous quarter, Safaricom's rivals, including Bharti Airtel's Kenyan unit added more subscribers, resulting in the company's reduced market share.

Airtel's subscribers rose 11.9 percent to secure a market share of 21.4 percent. Safaricom subscribers' market share has plunged to 65.4 percent from 72.6 percent in June last year.

Investors were unlikely to be concerned by the market share drop as Safaricom grew its user base, and it commands a big lead in revenue, said Eric Musau, a research analyst who covers the company at Nairobi-based Standard Investment Bank.

Safaricom and the regulator have been tussling over a report on competition in the industry, which among other things calls for price controls on Safaricom to help smaller operators.

According to regulator data in 2015, Safaricom had enjoyed the lion's share of revenue, with more than 90 percent in key categories such as voice calls. The latest revenue data was not available.

The fall in Safaricom's market share comes in the backdrop of a nine-month absence by its Chief Executive Officer Bob Collymore for medical treatment.

Collymore returned to Kenya in August and attended at least two public events soon after he resumed work.

"Safaricom is one of the companies which you are quite confident that the CEO isn't the only person who can run the business. He was ably represented and the organisation generally is quite well-structured," Musau added.

(Reporting by Duncan Miriri, Editing by Sherry Jacob-Phillips)