Influence of Value-Added Service Strategies on Performance of Telecommunication Firms in Kenya: A Literature Based Review
Some of the telecommunications firms in Kenya are experiencing a relative decline in Average Revenue per User resulting in overreliance on voice, short message serve and internet services as major source of revenue. This situation reveals that income from conventional voice services will not be enough for the mobile telecom service providers to survive. To overcome this, telecommunications firms are engaging in value added strategies as a source of new revenue and differentiation strategies. The study determines the influence of Value-Added Services Strategies on Performance of Telecommunication Firms in Kenya. The paper employs a desk study review methodology. A critical review of empirical literature is conducted to identify main thematic concepts of the paper. Telecom providers invest in value added strategies to be able to cross-sell additional mobile services and enlarge their share-of-wallet with the consumer. This way, the provider does not only get more revenue from its customers, but also creates value added to products and services offered. Some of the value added services impacting the telecommunication sector include e-commerce, social value added services, interactive voice response services, business process outsourcing, mobile money transfer and enterprise value added service. In Kenya, the mobile money services have been significant in enhancing performance of telecom companies. It is concluded that there are many benefits associated with adoption of value added service strategies in the telecommunication industry. By demonstrating the linkage to other core services, the benefits of value added strategies need to be enhanced through research and development. Research and development shall promote the innovation of products and services that are specifically tailored to meet customer needs. Service and product improvement must emanate from customers’ views and preferences. Considering the sum of resources invested into value added services systems, it is essential to ensure that the services meet customers’ needs and quality standards. In order to achieve this goal, and based on the findings, this study recommends that a proactive awareness programme should be developed and implemented to educate customers on the available value added services and how this will benefit them, as well as business partners on the potential of value added services in enriching their revenue growth, over and above cost reduction, operational efficiency and customer base growth and retention.
Key words: Communication based value-added strategies, Application based value added strategies, Performance of Telecommunication Firms, Kenya.
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