Telco Safaricom has been at the top of its game for a very long time, and over that period, the company has achieved some major feats thanks to the introduction of new products and services, as well as its incessant drive to stay innovative and appealing to its millions of customers.
The corporation has since re-evaluated its goals and themes following the launch of the Twende Tukiuke brand and system to rendering its services. The rebrand was announced in late 2019 with the For You tagline, with additional focus on simplicity, transparency, and honesty.
In an effort to align and position its operations with going beyond, taking that extra mile, and surpassing expectations, Safaricom has over the last couple of months been at the forefront with the launch of better products and services, while improving its existing portfolios. The same period has also seen the operator face some obstacles, especially network maintenance hassles and customer care lapses.
How has the journey been in the last one year?
Let’s jump right in.
The year (2020) started with an announcement that Safaricom was planning to build customer profiles based on their location data. The operator was at that time seeking for a supplier for location tracking and intelligence. The development was subject to other factors such as the Data Protection Act 2019 – and besides the announcement, no additional information was given about the project.
The year also started with some customer concerns. Some users reported that they were being contacted with Safaricom’s official customer care line. And those people were apparently not genuine because the calls were made for fraudulent reasons. The heat saw the operator investigate the matter and in the next coming weeks, the complaints dwindled, signaling that the issue had been fixed.
Former Safaricom CEO the late Bob Collymore, at one time, admitted that Masoko, the company’s e-commerce platform was a bad idea. At launch, it was received well, and made a name for itself for faster deliveries. At past festive seasons, Masoko was at the forefront with awesome deals that customers took advantage of.
However, squabbles with vendors saw the platform scale back to selling phones and their associated accessories. The majority of us wanted the platform to succeed, but that did not come to fruition.
Masoko is still here, and saw the launch of a dedicated smartphone app in Jan 2020.
January 2020 was a busy month for the operator. It partnered with M-Gas to provide cooking gas to low-income households at an affordable and flexible price. The gas cylinder provided were equipped with smart meters that showed how much a customer had paid for the service. The payments were processed via M-PESA, and the entre technology was powered by Narrow Band (NB) IoT network and 4G.
In January, there were credible rumours that the operator was testing 5G services. Not much information was given at that time, and over the year, it was hinted that the operator would launch the 4G successor in December.
There were also talks that Huawei was the discussing building the 5G network for the telco.
The promise never materialized, but more of that in a couple of minutes…
In early 2020, Safaricom was testing chargeable Wi-Fi hotspots within Nairobi. The spots were seen in various parts of the city. The model was akin to Facebook and Telkom Kenya’s mobile hotspots in Nairobi (for free, or not).
The project appears to have been put on pause because the operator didn’t make any announcement about mass rollout of the hotspots in the CBD.
In late 2019, the Postal Corporation of Kenya (Posta) alongside Safaricom decided to collaborate on a product named M-Post that targeted Safaricom subscribers who wanted to use postal services at a cheap. The service was well received, and had netted 150K subscriptions by Feb 2020.
Safaricom introduced SIM cards with the new 0110 and 0111 prefixes. In the old system, Safaricom used the 070x, 071x, 072x, 074x, 0757, 0758, 0759, 0768, 0769 and 079x.
The operator signed a strategic agreement with AWS, which allowed Safaricom to resell AWS services. According to the carrier, the agreement aimed to accelerate Safaricom’s internal IT transformation, cut operational costs and provide it with ‘a blueprint and skilled resources to assist customers with their journey to the cloud.’
The PostPay situation at Safaricom had been a tricky affair for sometime prior to the March 2020 revisions. The carrier had grandfathered legacy PostPay users from back in the day (the KES 1000 that was closed many years ago). The new product started at KES 1000 all the way to KES 10000.
The COVID-19 pandemic continues to hit the economy to date. However, when the virus hit Kenya, government bodies advised corporations and other business to cushion customers from the harsh effects of the disease, which, from the telco standpoint, included the introduction of mobile money waivers (for under KES 1000 transactions). The waiver lasted to the end of 2020.
Ethiopia has since allowed new players to take part in its mobile space. Safaricom, MTN and Orange SA had previously hinted plans to enter the Ethiopia telecoms space. Safaricom has since pursued the deal, and is on the verge of finally making an appearance in Ethiopia. More of that in a second…
This a device finance program launched by Safaricom that aims to see low-income Kenyans access smartphones. The customers can pay for a device of their choice (from a limited pool that includes Neon devices), starting from as low as KES 20 per day.
Safaricom customers can now read the digital version of newspapers in a convenient and welcome manner thanks to a new partnership between Safaricom and some media houses signed back in May 2020. The newspapers cost you a promotional KES 20 and are consumed on your smartphone. Customers pay for the service using their airtime.
In June 2020, Safaricom CFO Sateesh Kamath left the company. His new venture is a similar role for Vodafone Business that started in July 1, 2020. This made a second change in Kenya’s largest corporation after the company appointed the first Kenya CEO Peter Ndegwa in April 2020.
Kamath’s role was then assumed by Ilanna Darcy, albeit in an interim capacity.
The app was launched in June 2020 to purposely augment the offerings of the USSD code with useful features, such as growth tracking, access to full statements, improved transaction performance and easy account management.
Long-serving Safaricom Chairman Nicholas Nganga retired in July 2020.
His position was taken by former CEO Michael Joseph.
Joseph’s tenure started on 1st August 2020.
The revamped mySafaricom app was launched in September, following months of testing. It brought a visual overhaul to the interface with new features, including scratch card scanning and nifty M-PESA additions.
Impressive numbers during the April and June quarter
Safaricom gained 25% more fixed data subscribers to reclaim top spot from Wananchi Group.
In the same quarter, Safaricom’ s mobile service revenue in the industry generated 276.6 billion in 2019. This was in crease of 4.6% compared to 2018 when the industry generated 264.4 billion.
The new product was launched to target business owners who may not have pay or pay bill numbers, but want to separate payments from their personal M-PESA account.
The product is interesting because often, customers usually send cash to personal M-PESA accounts of food vendors, small kiosk owners, boda-boda operators, second hand clothes dealers, name them, who do not have a business line (Lipa na M-PESA). This means that finally, they can receive and separate business funds from their personal account.
Mixed results during the July-September quarter, takes loan
With a 4.8% and 10.5% drop in service revenue and profits before interest and tax, operator Safaricom did not have a very good HY of the assessed 2020/2021 FY.
Mobile data use cases were nevertheless impressive.
Its M-PESA revenues also dropped, a first for the company.
The pandemic also saw the company seek a KES 24.7 billion short term loan to oversee its operations.
Safaricom and Airtel questioned why the CA charges exorbitant prices for spectrum licenses.
According to Safaricom, ‘The spectrum fees need to assist operators in striking a balance between efficient use of the resource and the cost of the service to the customers.’
Airtel Kenya added that ‘excessive fees can impede policy goals of delivering broadband access to everyone and lead to valuable spectrum remaining unsold.’
Rita Okuthe left Safaricom in Dec, following the departure of CFO Sateesh Kamath six months earlier. She was replaced by Joseph Wanjohi in acting capacity.
$500 million loan for Ethiopia entry and stalled 5G
In December 2020, Safaricom and its partners signed an agreement to borrow $500 million from the US International Development Finance Corporation to fund expansion to Ethiopia’s telco market, effectively sealing the Ethiopia entry deal.
A few days later, it emerged that Huawei would no longer build Safaricom 5G systems. The 5G plans were also shelved for the time being.
The new tariff reductions affected more than 90% of all customer transactions when sending money. For example, it now costs KES 6 to send between KES 101 and KES 500 down from KES 11 and sending between KES 1501 and KES 2500 will cost KES 22 down from KES 41.
And in 2021…
Safaricom is one of the many companies that will be offering cashless Matatu fare services in the near future.
The company is also testing a standalone M-PESA app. It is yet to go live, so we will keep an eye on it as soon as it happens.
Oh, the company has an M-PESA Bill Manger for businesses. The service is targeting businesses or utilities with repeat payments thereby offering a platform where they can present and receive pending payments from customers and issue electronic receipts.
Safaricom had a busy 2020, and it is likely the same thing will happen in 2021. The year was also marred by multiple network interruptions, most of which affected M-PESA. They appear to have since been fixed. At the moment, the telco is struggling in addressing customer care issues, which, if you go through its social feeds, prove that the company has slipped from its once superior position. Also, fibre services have not been at their best thanks to many reported cases of outages or outright slow connections.
Will the operator go beyond expectations according to its Tuende Tukiuke goal?
We certainly hope so.