PRICING STRATEGIES AND MARKET SHARE IN THE TELECOMMUNICATIONS SECTOR IN KENYA: A CASE STUDY OF TELKOM KENYA

Authors: Gladys Wanjiku Njoroge, Dr Grace Karemu & Dr John Mutugi

ABSTRACT

Kenya is a highly competitive telecommunications market where Telkom Kenya has faced substantial strategic interventions. This study investigated the impact of penetration pricing, bundle pricing, flexible pricing, and value-based pricing on Telkom Kenya’s market share. The study drew on Porter’s Competitive Advantage Theory, Game Theory, and Customer Value, and used a mixed-methods cross-sectional survey design involving 267 respondents from 5 departments at Telkom Kenya in Nairobi. The study used multiple linear regression and narrative analysis to analyze the data. The market share results were all significant and positive (r = .401 to .482) for all four pricing strategies. All strategies tested had significant positive effects; penetration pricing (β = .281, p < .001), value-based pricing (β = .225, p < .001), flexible pricing (β = .149, p = .018), and bundle pricing (β = .126, p = .050) explained 28.1% of the variance in market share. The study concludes that pricing plays a significant role in market share. Still, it is not enough and recommends penetration and value-based pricing in addition to investing in network quality.

Keywords: Pricing strategies, market share, penetration pricing, bundle pricing, flexible pricing, value-based pricing, telecommunications, Telkom Kenya.

REFERENCES

  1. Abrate, G., Fraquelli, G., & Viglia, G. (2020). Dynamic pricing strategies: Evidence from European hotels. International Journal of Hospitality Management, 89, 102407.
  2. Adera, G. M., & Muturi, W. (2024). The impact of dynamic pricing models on customer retention in the Kenyan telecommunication industry. African Journal of Business Management, 18(1), 12-28.
  3. Al-Amri, A., & Al-Hakimi, A. (2021). The effect of pricing strategies on increasing market share: A field study in Amran Cement Factory. Journal of Social Studies, 27(2), 75-112.
  4. Arif, S. A. F., & Subrahmanyam, S. (2022). Penetration pricing strategy and customer retention – An analysis. Journal of Positive School Psychology, 6(5), 7058-7072.
  5. Chege, J., & Mwangi, S. (2023). Freemium pricing strategies and competitive advantage: A comparative study of Safaricom and Airtel Kenya. Journal of African Business Strategy, 15(2), 45-62.
  6. Chidinma, O. O., Nkallu, W. A., & George-Oparati, K. W. (2025). Pricing strategies and marketing performance of food and beverage firms in Rivers State. BW Academic Journal, 2(1), 45-63.
  7. Communications Authority of Kenya. (2025). Annual Report for the Financial Year 2024-2025. Nairobi: Communications Authority of Kenya.
  8. Gitonga, G. M., Kariuki, P., & Kimani, E. (2025). Market penetration strategies and competitive advantage of the telecommunication firms in Kenya. International Journal of Strategic Management, 4(1), 1-26.
  9. Izadpanah, M., & Vaezi, A. (2023). A bundle pricing approach for mobile telecommunication services: Method and data analysis. Journal of Emerging Trends in Marketing and Management, 1(3), 7-25.
  10. Lhonor, C., & Peter, A. (2025). Strategic pricing for market penetration: Analysing its impact on gaining market share in competitive industries. International Journal of Sustainability Practices in Finance, Management and Entrepreneurial Studies, 2(1), 113-125.
  11. Marfil, J. J., Sánchez-Esguevillas, A., & Carro, B. (2022). Bundling impacts in the Spanish telecommunications market. arXiv preprint arXiv:2212.04189.
  12. Mwito, R. M., Rintari, N., & Muema, W. (2024). Influence of value-based pricing on growth of small and medium enterprises in Imenti North Sub-County, Kenya. Journal of Marketing and Communication, 4(3), 1-9.
  13. Nagle, T. T., Hogan, J. E., & Zale, J. (2016). The strategy and tactics of pricing: A guide to growing more profitably (5th ed.). Routledge.
  14. Nambanga, H. E. (2021). Limit pricing through price discrimination: A theoretical study among telecommunication companies in East Africa. International Journal of Science and Business, 5(1), 57-66.
  15. Ndwandwe, N. H., & Khoza, F. (2026). The impact of pricing strategies on the growth and sustainability of small and medium enterprises: Empirical evidence from South Africa. Administrative Sciences, 6(1), 10.
  16. Neyman, J. (1934). On the two different aspects of the representative method: The method of stratified sampling and the method of purposive selection. Journal of the Royal Statistical Society, 97(4), 558-625.
  17. Nunnally, J. C., & Bernstein, I. H. (1994). Psychometric theory (3rd ed.). McGraw-Hill.
  18. Orangi, A. K., & Moraa, J. (2025). Influence of price-based segmentation drives financial performance of fashion merchandisers in the Kenyan market. International Journal of Research and Innovation in Social Science, 9(11).
  19. Osborne, M. J., & Rubinstein, A. (1994). A course in game theory. MIT Press.
  20. Otieno, B. O., & Mwale, H. (2025). Safaricom fibre price wars with both local and international competitors like Starlink and Airtel and its effects on the telecommunications industry in Kenya. International Journal of Economics, Business and Management Research, 9(1).
  21. Porter, M. E. (1985). Competitive advantage: Creating and sustaining superior performance. Free Press.
  22. Ribeiro, H., Barbosa, B., Moreira, A. C., & Rodrigues, R. (2024). A closer look at customer experience with bundle telecommunication services and its impacts on satisfaction and switching intention. Journal of Marketing Analytics, 12(3), 668-686.
  23. Saunders, M., Lewis, P., & Thornhill, A. (2023). Research methods for business students (9th ed.). Pearson.
  24. Shah, U. R., Maore, S., & Nzioki, S. (2022). The influence of market penetration strategies on market share in the hospitality industry in Arusha, Tanzania. International Journal of Scientific Research and Management, 10(7), EM-2022-3689.
  25. Steinbrenner, F., & Turčínková, J. (2021). The value-based pricing determination matrix for pricing method selection. Central European Business Review, 10(4), 99-123.
  26. Tian, S. Q., Liu, C. H., & Jiang, F. (2023). Evaluation of customer value-based pricing strategies in Hainan’s travel agencies under a free trade port framework. Journal of Operational and Strategic Analytics, 1(4), 198-213.
  27. von Neumann, J., & Morgenstern, O. (1944). Theory of games and economic behavior. Princeton University Press.
  28. Yamane, T. (1967). Statistics: An introductory analysis (2nd ed.). Harper & Row.
  29. Yussuf, M. A., & Kilei, P. (2024). Pricing strategies on brand performance: A case study of Safaricom Limited Kenya. African Journal of Social Issues, 7(2), 156-175.