Safaricom: Africa's Communications Leader

Safaricom describes itself as "a leading provider of converged communication solutions, operating on a single business driver that has a peerless understanding of voice, video and data requirements." Additionally, they have also been working extremely hard to be a "one stop shop" for integrated and converged data and voice communication solutions. Safaricom with its countrywide network is the only network that can provide broadband high-speed data to its customers through its 3G network, Wimax and fibre.

They have seen an incredible 53% growth rate, added 3.3 million subscribers to the existing 2.3 million registered '" all brought to the company via their M-Pesa service which can best be described as a mobile banking solution. Safaricom, which has its biggest "foot print" in the East African Nation of Kenya, where mobile phones (as many other parts of Africa) are the preferred method of communication.

With Africa's vast landscape and terrain many are unable to conveniently communicate via lap or desktop - simply due to portability issues. With the use of mobile phones, people are better able to communicate and transact business. Safaricom has developed a huge market around information and information sources. They have been able to identify markets and created unique information service/products that have been extremely hard to duplicate or compete with. "The M-PESA product is aimed at the mass market within the country, as both banked and unbanked will benefit from the increase convenience M-PESA offers for transferring money, buying airtime and paying bills.This is important as M-PESA is all about financial inclusion so providing service to both the rich and poor and often connecting the two!" With the extreme success tied to M-PESA , they now have developed M-KESHO. In essence, M-PESA puts money into your checking account while M-KESHO allows the recipient to place money into a savings account for future availability. What Safaricom has done in essence is answered addressed this point that; "poor is not about having no money at all but about only having money at a given point in time; in essence it can be a cash flow problem."

"Since we have become M-PESA agents we have no time to rest. This thing has even over-run our other business". Since its introduction in March of 2007, the M-PESA application has had great success all over Kenya. With a growing subscriber base, Safaricom has dominated the market place to the tune of an estimated $18 Billion Ksh (1 US = $80.95 Ksh) being moved through the system, via person-to-person transfers.

Enter Zain Kenya with it's "Zap" product which many anticipate will bring an "end market leader Safaricom's two year monopoly with their money transfer product, M-Pesa.This should be good news forconsumers, who will probably benefitfrom lower costs for the service.Especially since these services tendto benefit the lowest income individuals who traditionally don't have access to or utilize regular banking services."

Since it's launch in 2007 many in Kenya were concerned about Safaricom's and M-Pesa dominant position in the market. So, by approving the entry of Zain (Zap) into the market place, the Kenyan government has taken a huge step in creating a competitive environment and thus providing options for the consumer.

As we explore the market place domination of Safaricom (M-Pesa/M-Kesho), we are afforded the opportunity to look into the technology sector and how it is working in Africa and other emerging Markets.