S A FA R I C O M
SAFARICOM
Investing in New Capability
to Fuel Future Growth PRODUCTION: David Napier
New stores, new call centres, new 4G coverage, new customers, new products, new innovations, and a new CEO on the horizon – now is an extremely exciting time for Kenya’s Safaricom, one of the leading communication businesses in East Africa. 2 / www.enterprise-africa.net
INDUSTRY FOCUS: TECHNOLOGY
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Starting life in 1997 as a subsidiary of Telkom Kenya, Safaricom has come a long way in the past two decades. In 2000, when the UK’s Vodafone acquired 40% of Telkom Kenya, Safaricom’s amazing growth story began. With just 26,000 subscribers by 2002, and just KSh 9 billion annual revenue, Safaricom was small but playing in a booming market. After much innovation, tech advancement and huge effort to delight customers, the company now boasts more than 30 million customers, more than 5000 employees, more than 64% market share, and KSh 225 billion revenues. Owned 40% by Vodafone Kenya, 35% by the Government of Kenya, and 25% by various retail and institutional investors, Safaricom is one of Kenya’s leading communication organisations and holds the vision of ‘empowering a connected society’. The future is extremely exciting for Safaricom as it pushes for further growth and improved market share in an economy which expanded at its fastest rate in 10 years last year (6.3%), and is expected to continuing growing by around 6% in 2019. 30 MILLION & COUNTING In March, for the first time, Safaricom’s customer base reached more than 30 million. The company claimed that this landmark milestone cemented its position as the leading mobile service provider in Kenya.
// THE GROWING DEMAND FOR OUR SERVICES IN VARIOUS PARTS OF THE COUNTRY IS DRIVEN BY THE NEED FOR CUSTOMERS TO ADOPT A DIGITAL LIFESTYLE // 4 / www.enterprise-africa.net
// THIS BREAKTHROUGH REFLECTS OUR CUSTOMER’S VOTE OF CONFIDENCE IN OUR PURPOSE OF TRANSFORMING LIVES // “We would like to thank each of our more than 30 million customers for choosing Safaricom as their preferred network which has contributed to our achievement of this remarkable and historic milestone,” said Sylvia Mulinge, Safaricom’s Chief Customer Officer. “This breakthrough reflects our customer’s vote of confidence in our purpose of Transforming Lives. Last year as we turned 18, we announced our brand promise of ‘Nawe Kila Wakati’, where we renewed our commitment to always deliver great value on our network. “We continue to appreciate our customers through the ‘Ndoto Zetu’ initiative, where we are coming together to make a difference to their communities, inspired by their dreams. Our objective is to make a positive change across more than 500 communities,” added Mulinge. Safaricom rewarded its loyal clients by dishing our various bonus airtime and data packages in March. NEW CALL CENTRE Also in March, further excitement came for Safaricom as it opened a new call centre in the western city of Eldoret. With a quickly growing urban population, Eldoret is an important strategic regional hub for Safaricom. The KSh 900 million new centre created employment for around 800 people and is designed to help improve customer service and efficiency. Currently, the company receives some 150,000 calls each day and its target is to improve the speed and manner in which these calls are handled. “We celebrate yet another milestone in line with our strategic business objective of putting the customer first. We want to ensure that, as we continue growing and investing
in technology and in our network, we do not lose sight of our customers and their needs,” said Mulinge. Uasin Gishu County Governor, Jackson Mandago was present to launch the new facility and he commented: “We welcome Safaricom’s move to set up a Call Centre in Uasin Gishu. Eldoret is a cosmopolitan town and is also one of the fastest growing towns in Kenya making it an attractive destination for businesses. We thank Safaricom for partnering with us to transform the lives of our people.” Right from the start, Safaricom has been keen on local employment. The company quickly went about hiring 300 interns from various local educational facilities. “This will not only help us to build partnerships with the learning institutions but will also enable us offer the youth work experience and mentorship,” said Mulinge. Currently, Safaricom is busy rolling out a number of initiatives designed to reduce the number of enquiries flooding into its call centres. An in-app AI chatbot system named Zuri available through Telegram and Facebook Messenger allows customers to handle basic requests without the need to call, and a new voice biometric system called Jitambulishe allows customers to reset personal information, including their M-PESA pin, without the need to call. NEW MIGORI STORE Another boost for Kenya’s west came at the beginning of April when Safaricom announced the opening of a new retail store in Migori. The seventh store in the county, and 53rd overall, is aimed at customers who previously had to travel to Kisii County. “The need to open the retail shop has been driven by the high number of
INDUSTRY FOCUS: TECHNOLOGY
customers who are seeking our services at the care desks. We felt the need to have a space where we can have all our products and services under one roof even as the care desks continue to offer some basic services. We expect to serve an average of 250 customers every day in this new shop,” said Chief Special Projects Officer, Joseph Ogutu. “The growing demand for our services in various parts of the country is driven by the need for customers
// WE WANT TO ENSURE THAT, AS WE CONTINUE GROWING AND INVESTING IN TECHNOLOGY AND IN OUR NETWORK, WE DO NOT LOSE SIGHT OF OUR CUSTOMERS AND THEIR NEEDS // 6 / www.enterprise-africa.net
to adopt a digital lifestyle, enquiries on DigiFarm, fiber to the Home and Business, E-Commerce and M-PESA services. Part of our strategy is to be able to cater for all these services at the shops and ensure that we offer integrated solutions to all our customers,” said Ogutu. M-PESA ON ALIEXPRESS In an effort to further enhance customer experience, and to drive more traffic through its own channels, Safaricom announced in March that it had formed a partnership which would allow for the purchase of goods through AliExpress using M-PESA. M-PESA, one of the world’s most popular mobile-phone based money transfer systems, was developed specifically for Safaricom and launched in 2007. It has become world-renowned because of its rapid success, and can now be used, especially by microtraders, to purchase manufacturing goods from China. Safaricom has teamed with Ant
Financial Services – one of the world’s largest fintech service providers – and together the two organisations will position M-PESA at the checkout stage of a transaction through AliExpress. “Our more than 21 million customers can now enjoy the safety, reliability and convenience of M-PESA when shopping on AliExpress, a leading, global e-commerce marketplace. This partnership seeks to connect Kenyans to even more business opportunities by enabling them to seamlessly source, purchase and import goods from the world’s leading manufacturer,” said Mulinge. “We are keen on leveraging the power of mobile technology to transform lives, and we see a great opportunity to do this by connecting people to people, to knowledge and to opportunities. We believe that the mobile phone has the ability to pull down some barriers to trade by enabling global e-commerce, and this partnership with Ant Financial Services marks yet another important milestone
SAFARICOM
Bob Collymore - Safaricom CEO
not just in Safaricom’s efforts to take M-PESA beyond Kenya, but to Kenya’s participation in the international e-commerce marketplace,” she added. Cashless transactions are on the rise globally, and in Kenya payments through mobile phones are the preferred method. This is just another step in Safaricom’s journey towards taking M-PESA global. FULIZA In January, the company launched a new M-PESA overdraft facility. In line with the company’s mantra of ‘transforming lives’ it was discovered that millions of transactions are cancelled every day because of a lack of funds in people’s accounts. Usually, the funds are topped up quickly and the transaction is quickly completed, so the new overdraft system helps to solve that problem. Chief Financial Services Officer, Sitoyo Lopokoiyit says that investment into big data analytics, customer research, and innovative technology
has allowed the company to realise the gap in the market, and fill it with a new product – Fuliza. “It is a product that we developed together with our partners KCB and CBA, and what it does is provide an overdraft facility with M-PESA that allows customers to complete their transactions,” he says. “Before we develop a product, we get a lot of customer insights. We’ve had KCB M-PESA for four years, M-Shwari for seven. Over the years, we have gotten a lot of insight from customers on what they want. “Safaricom has invested millions of dollars in the technology that we have for M-PESA. We have invested a lot in systems that actually enable us to understand what our customers want. We also do a lot of research to find out what our customers want, and get a lot of feedback from the other products we have. That is what has enabled us to develop a product that has resonated very well with Kenyans,” he adds. Fuliza is Swahili, meaning
‘continuously flowing’, coming from the word mfululizo. “We began testing this product in October last year,” explains Lopokoiyit. “We went live on January 5 this year after testing the product for three months with 50,000 customers. We had gained a lot of insight after analysing our big data to understand what the customer wants, and we’ve been finetuning the product since then. “It’s good to see that we hit the right tone in terms of the product with our customers. But the numbers are not the only thing that’s important to us. It’s also about whether we are transforming lives. “We have received good feedback on how to improve the product, even though customers are generally happy with it. There are certain things that we have started changing based on the feedback that we have been getting, but we are still in the early days. This is a product that will take another 12 months or so to be fully mature, as we get more feedback from our customers
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INDUSTRY FOCUS: TECHNOLOGY
and insights from the data we collect.” The plan for the future is to take Fuliza into the seven other African countries where Vodacom has a M-PESA presence. The overdraft is designed to solve a clear problem in the market, and while Lopokoiyit is keen to point out that it is not a traditional loan, it certainly comes as a lifeline as demonstrated in the phenomenal growth that the product has achieved. “Fuliza is now another Kenyan buzzword,” says Lopokoiyit. MORE 4G Safaricom launched its 4G network in 2014 and has every day since looked to improve and widen the now essential service. In May, it was announced that the company plans to double the number of 4G base station sites to 5000 by March 2020. This will result in 80% country coverage across all major towns and cities. The company expects to spend
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KSh 36 billion on the project which will help bring internet speeds of up to 100 MB per second to a majority of the population. Outgoing CEO, Bob Collymore made the announcement as he detailed a net income increase of 14.7% for the financial year ending 31 March 2019. “For a majority of Kenyans, the mobile phone is often the first
and only link to the Internet. By broadening our 4G coverage to almost anyone in the country, we aim to ensure that no one has to miss an opportunity or get left out because of lack of access to affordable, quality, high-speed broadband.” This, combined with the news of the launch of a 400G network link in February, make for a highly attractive
SAFARICOM
// THE NUMBERS ARE NOT THE ONLY THING THAT’S IMPORTANT TO US. IT’S ALSO ABOUT WHETHER WE ARE TRANSFORMING LIVES. // offering for existing and new customers. The 400G link enables Safaricom to support increasing video consumption alongside demand for higher video quality from both its home and mobile customers. The aim here is to better serve customers with increasingly connected smart homes. Also, mobile data usage has been doubling year-onyear and the Safaricom fibre network now reaches more than 220,000 homes and 17,000 businesses. The 400G link is supported by Chinese tech giant, Huawei, and will quadruple the company’s capacity to carry internet traffic over 500 kilometres. The link will achieve a speed of up to 400 Gigabits per second, an upgrade from the previous connection which offered speeds of 100 Gbps. While voice services and M-PESA
still make up the largest contributions to revenue, Collymore was clear that diversification of a quality portfolio will help to drive growth in the future. “We are pleased with the strong results we have delivered for the year, building on our long track record of delivering relevant products and putting the customer first. We foresee continued growth in the future,” said Collymore. “Looking ahead, the business will sustain its momentum of investing in the quality of our service and diversification of our revenue portfolio to ensure sustained returns to shareholders.” But, with Collymore to step down following a period of extended medical leave in 2017/18, the challenge for Safaricom is now to quickly appoint a successor to help lead East Africa’s
most profitable company continue to thrive. Some have called for the next company leader to be Kenyan, but Collymore has said getting the right person is the most important thing. The company will move forward whatever the situation in the boardroom, and continuing to solve problems and transform lives will remain at the core of everything Safaricom does. Perfectly positioned to grow further in the future, now is an exciting time for the company “Kenya is a hotbed of innovation and technology and there is no other place in Africa that is as vibrant as Kenya in FinTech,” says Lopokoiyit – and we should expect to see Safaricom exports like M-PESA more and more around Africa.
WWW.SAFARICOM.CO.KE
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