Kenya’s market exposure Huawei, a leading telecom, is threatened due to US’s blacklisting of the Chinese giant.
Standard Investment Bank (SIB) says in a topical note on Safaricom that the Huawei ban is likely to have an impact on future smartphone sales.
It said that in the long-term the sanction would also make network equipment more expensive because it could reduce the number of suppliers in what is already a small pool.
SIB said although the Huawei issue was still developing, concern was on whether Safaricom’s British parent firm, Vodafone, would look to take a similar position as its US counterparts on dealing with Huawei.
“Whereas Safaricom maintains it has a dual-vendor network, Huawei is the bigger supplier to Nokia by our estimation, potentially presenting a material risk,” said the SIB report.
“We see an impact on future sales of smartphone and network equipment, especially if support for some of the core services used in the Kenyan market such as Google (Android, Google Play Store Services, Security, YouTube, Gmail, Drive.) is applied.”
Safaricom had a network expansion and maintenance capital expenditure of between Sh35 billion and Sh39 billion in a financial year.