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SAFARICOM WORKING WITH GOOGLE TO SPREAD 4G DEVICES ACROSS KENYA

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Mobile network operator, Safaricom is targeting about one million Kenyans with affordable smartphones in partnership with Google, in a plan that will see low-income earners pay as little as $20 shillings ($0.20) daily to acquire smartphones and upgrade to 4G enabled devices.

VENTURE AFRICA reported that the goal is to “democratize” usage of data among Kenyans, the telco chief executive Peter Ndegwa noted. “Data penetration is still not at the right level. Many people don’t have smartphones,” Ndegwa said after an online investor briefing Wednesday. Customers will pay 20 shillings per day for nine months. 

Safaricom seeks to eventually convert about 4 million 2G and 3G-enabled phones to 4G in Kenya along with a plan to fully cover the country with its 4G network by the end of this year. “If you have an app, you can’t use it on a 2G phone,” the CEO said.

The project is in line with the Safaricom’s plan to improve its data business, which is one of its fastest-growing revenue streams. 

It hopes that increased smartphone usage will boost revenue further and offset a decline in mobile calls, where it has experienced a slight revenue fall due to saturation.

Peter Ndegwa, Safaricom new CEO.

The Kenya-based company, part-owned by Vodacom in South Africa and Britain’s Vodafone, recently released its results for the financial year ended March. Rapid growth in the data business, during the second half, lifted annual earnings before interest and tax 13.3 percent to 101.5 billion shillings ($950 million).

Revenue from mobile data, where Safaricom has been involved in an aggressive fight for market share – the company reportedly offers internet bundles without expiry – rose 12.1 percent to 40.7 billion shillings, after recording 21 percent growth in the second half.

Earnings growth was also driven by the first-ever drop in operating expenses, Safaricom’s finance chief Sateesh Kamath said, driven by digitization, increased efficiencies, and the maximization of the use of the assets. 

Revenue from Safaricom’s M-Pesa financial services business jumped 12.6 percent to 84.4 billion shillings, a third of service revenue. Meanwhile, the company is foregoing about 5.5 billion shillings in revenue from the mobile money service after it removed charges on small transfers, to facilitate cashless transactions and help slow the spread of the coronavirus.

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