As we close the year 2011 and look forward to the year 2012, we thought that we could get a feeling of what we should expect in the Kenyan communications industry. We would be looking to speak to other key players in the industry. We found it only great to get the initial feel of what to expect in 2012 from East and Central Africa’s most profitable company’s CEO, Bob Collymore.
What are some of your most wonderful experience? Which experience gave you the worst nightmare?
The best experience was to see how Kenyans rallied around the Kenyans for Kenya initiative earlier in the year. My nightmare is always M-Pesa outages.
What are your 3 predictions for the communications sector in 2012?
Continued strong growth in data and internet usage. Social media will play a bigger role in how corporate and political engages with the public (incidentally giving young people a greater voice). Data pricing will come down as some of the cost barriers like spectrum fees are addressed.
Smartphones seems to be the next frontier of competition as it supports a host of services boosting operator earnings. In what 3 unique ways is Safaricom making ownership of a smartphone easy in kenya?
We have to give customers a reason to want a smartphone and that reason is largely going to be about content. We will therefore be increasing the number of partnerships we have to develop and deliver mobile friendly content. We also want to continue to drive down the price of handsets and will be leveraging our relationship with Vodafone as well as our direct relationships with vendors such as Huawei to bring down the entry level prices. Finally, we will need to continue to drive down the cost and therefore the retail price of broadband access.
Safaricom through its live services seeks to promote local content. What has been the experience so far?
I think we have made some good progress but still have a long way to go. Again we want to work with experienced partners like Google who have a similar positive outlook on the power of local content.
What new content related service should Safaricom clients expect in 2012?
We have a whole string of things up our sleeves but I’m not sure we want to divulge them right now.
We have heard that Safaricom is developing few apps for android and maybe ios. At what stage is the development?
Most of the app development in the coming year will be from independent developers. Kenya is lucky to have a young and very vibrant developer community. At Safaricom we need to look at how best we can support these developers in a way that makes good business sense for everyone involved.
Social media has gone mainstream in Kenya with the majority still on Facebook while twitter is closely following and Google+ just starting. What 3 lessons do you draw personally and as Safaricom on social media?
I don’t agree that it is yet mainstream although it is getting there. I say this because many people in Kenya still seem surprised that a few corporate and political leaders are on social media. When compared to Europe and the USA we are still in our infancy.
I guess my three lessons are that
- issues on social media have to be dealt with immediately before they spiral out of control.
- it’s about a conversation with your stakeholders, not a sales pitch and
- there are a lot of attempts at cyber bullying out there under the guise of activism.
A very good number of Safaricom shareholders are young upward mobile investors. They are also the hardest to maintain. Why should they continue trusting Safaricom?
Shareholders, regardless of their age or social status trust companies if they uphold high ethical standards, understand and serve their customers, provide a reasonable return on their investment and make a difference to the world in which they live. I believe Safaricom is uncompromising on all these issues.
Safaricom has of late been experiencing disruptions on its mobile money service, M-Pesa. What remedial measures are you putting in places to ensure that this does not occur again?
The recent M-Pesa disruptions have not only been a massive pain point for our customers but also for our partners at IBM, Vodafone, Microsoft and of course here in Safaricom. The system is now in what we call hyper-care which means it has the highest level of attention of all the partners. Customers rightly get mad at us when there are failures but i can assure you that during times like last week, we were all throwing everything we had at the problem as the teams worked 24 hours a day to find resolutions to the problem.
Kenyans are using the Vodafone owned M-Pesa service more than anyone else. The service is still hosted outside Kenya. Why is this so and is Safaricom seriously thinking of carrying out an extreme overhaul of the system to sort the transaction querying disruptions? Will the services ever be hosted in Kenya?
When the service was first launched it was envisaged to be a single platform that would host the service across many markets. As we all know, the market in Kenya has turned out to be bigger than anyone ever envisaged with a much higher number of transactions than we had originally planned for.
In the few days before Christmas, for example, we witnessed a peak of more than 250 transactions per second; a year ago we were handling fewer than 70 per second inevitably, therefore we face challenges working across such a geographically dispersed environment.
This is why we have started the process of looking for a second generation platform which would give us more flexibility, functionality and control here in Kenya. I must warn, however, that this is a very complex process and an overnight solution will not be found.
Most of the M-Pesa paybill transactions are not real-time. This has made Safaricom be blamed by utility consumers – water, electricity and even pay tv services – most of the time wrongly and sometimes rightly so. Is Safaricom going to release an api even to businesses to enable direct connection to the m-pesa database for realtime transaction?
The platform was not designed to make the release of an api as straightforward as we would like. However, we’re trying to find work around solutions to some of these challenges
Will Safaricom consider having cross border m-pesa transactions especially in east africa instead of users relying on a third party like western union to get to send money to m-pesa users in other countries?
Cross border transactions present some challenges with crime, money laundering and terrorism (CMT) risks where we have to be very careful. However, there is a cross network initiative that we’re referring to as the international money transfer (IMT) hub that will allow users to send money across borders and across networks whilst minimising these risks.
On devices, should we expect more? Any surprises? Handsets, tablets and laptops which we should expect?
I don’t think we’ll see many surprises, but rather a continuing evolution from where we are. We’re likely to see more and cheaper tablets hitting the market and i would personally like to see cheaper but robust tablets that can be used by school children in conjunction with educational content providers and using our cloud services.
This year we launched our Webbox and I can see other such products in 2012. Smartphone prices will continue to come down and we would like to be at the forefront of driving down the retail prices.
Will Safaricom be selling any of the below $200 tablets?
We haven’t yet seen production models of sub $200 tabs but if the power point presentations i have seen are to believed then we would most certainly want to be offering them to our customers.
Why must Safaricom build its own fibre link? Is acquisition not a more viable option?
Reliable fibre is critical in delivering our data promise and whilst there is a lot of fibre in the ground, it isn’t always where we want it and not always as reliable as we would like. This is why we have started the process of gathering the data points in order to make an informed decision on the subject.
If Safaricom goes ahead with the deployment of its own fibre link, how long will it take for it to be live?
We need to evaluate the responses to our recent RFQ before we will be in a position to determine if and the extent to which we are likely to roll out a fibre network.
Most of the mobile data clients have not experienced the real 3g speeds, 3.6, 7.2. Most of the areas out of the key towns are still on edge. How is Safaricom going to fully utilise the 3g spectrum before the deployment of next generation networks?
You’re right, there is still a long way to go before our 3g spectrum and network is fully utilised. You will recall at the interim results we said that although slightly more than 50% of our network in 3g enabled, there are still only around 1 million 3g handsets attached to the network
Safaricom signed an exclusive deal with jtl but when Safaricom finally builds its own fibre network, it will have to compete with the like of jtl which already knows a great deal about Safaricom’s data weak and strong points. How will Safaricom handle competition from former insiders?
Safaricom and JTL have always had a very close relationship and we intend to continue doing so. As i said earlier, there are gaps in our ability to deliver consistently to our promise of affordable and reliable data connection and to this end we are exploring all our options which we expect to be complementary to (rather than competing with) to our existing relationships.
Safaricom’s domination of data standing now at 95% is more dangerous to itself as it seeks to battle claims of poor quality of non-delivery on promises. How will Safaricom neutralise such complaints from clients?
We have to deal with these issues head-on and the major problems we face in delivering on our promise are transmission (invariably read fibre) and power. Both these are areas of focus for the management team (hence the review of the fibre strategy).
Will Safaricom start giving preferential treatment to high density middle-class estates in key town while offering new services / solutions? These areas have generally been ignored by Safaricom yet they are the areas where the heavy data and social media users reside.
For sure we are engaging in more intelligent customer segmentation and we will be trying to meet the specific needs of specific customer segments
Will Safaricom deepen its engagement with bloggers in 2012 for a win-win result?
I sincerely hope so