Safaricom PLC is a listed Kenyan mobile network operator headquartered at Safaricom House in Nairobi, Kenya. It is the largest telecommunications provider in Kenya, and one of the most profitable companies in the East and Central Africa region. The company offers mobile telephony, mobile money transfer, consumer electronics, ecommerce, cloud computing, data, music streaming, and fibre optic services. It is most renowned as the home of MPESA, a mobile banking SMS-based service.
Safaricom controls approximately 64.5% percent of the Kenyan market as at 2020 with a subscriber base estimated at approximately 35.6 million.
In terms of voice market and SMS market share Safaricom controls 69.2% and 92.2% respectively.
Safaricom was formed in 1997 as a fully owned subsidiary of Telkom Kenya. In May 2000, Vodafone Group PLC of the United Kingdom acquired a 40% stake and management responsibility for the company. In 2008, the government offered 25% of its shares to the public through the Nairobi Securities Exchange.
Safaricom was ranked as Africa’s Best Employer, 67th in the World by the Forbes Global 200 list of World’s Best Employers. In March 2018, Safaricom was ranked as the #1 company to work for in the annual BrighterMonday Best 100 Companies to Work for in Kenya according to career professionals and job seekers.
As of 2020, Safaricom employed over 4,500 people permanently and over 1900 people on contract. 75 per cent of the company’s employees were based in Nairobi, the Headquarters, with the remainder based in other big cities like Mombasa, Kisumu, Nakuru and Eldoret, in which it operates retail outlets. It has nationwide dealerships to ensure customers across the country have access to its products and services.
In November 2012, Safaricom partnered NCBA Bank and came up with a revolutionary banking product, M-Shwari, which allows M-Pesa customers to save and borrow money through mobile phone while earning interest on money saved tapping into an underdeveloped financial services market.
Michael Joseph served as the founding CEO between July 2000 and November 2010. He transformed the telecom from a subscriber base of less than 20,000 to over 16.71 million during his previous tenure. In his last full year as CEO, Safaricom posted a 37 percent rise in pretax profit.
Bob Collymore took over at Safaricom in November 2010, replacing Michael Joseph who currently sits in the telco giant’s board as the Chairman. Collymore oversaw the introduction into the market of various mobile money products that have given the company leverage among its competitors. Collymore was also been at the forefront in leading the charge against regulatory efforts to clip the company’s wings due to its size and dominance. After a two-year battle with cancer, Bob, the longest-serving executive died on July 1st 2019 leaving behind a company with doubled user base and profits increased by 380%, turning it into a $10.8billion. Michael was appointed as interim chief.
Peter Ndegwa was appointed as CEO on effective April 1st 2020
2G service on 900 MHz and 1800 MHz. 3G DC-HSPA+ service on 900 MHz & 2100 MHz. Safaricom later launched LTE-A (4G service with carrier aggregation) service in Nairobi and Mombasa on band 20 (800 MHz) and band 3 (1800 MHz) in December 2014 and has expanded to other cities. Safaricom’s competitors, Airtel Kenya and Telkom Kenya have expressed dissatisfaction with the way the regulatory body Communications Authority of Kenya, awarded Safaricom its LTE (long Term Evolution) license to operate at 800 MHz.
Safaricom was the first company in Kenya to possess 3G Internet technology with recent success of 4G / LTE connectivity currently in all major Kenyan cities. In March 2021, Safaricom became the second network operator in Africa after Vodacom to launch a live 5G network, initially available in Nairobi, Kisumu, Kakamega and Kisii.
Flashback service (‘Please Call Me most of Safaricom’s customers, network congestion emerges from a practice called ‘flashing’. Flashing is the practice of calling another mobile user, but disconnecting before the connected call is answered. It provides a method for mobile users to alert someone that they wish to be called, but either can’t, or won’t, pay for the call. The method is cost-free for the users; but costly in network bandwidth.
That is why Safaricom introduced a flashback service that gave every subscriber five free SMS messages with a single predefined message stating “Please call me. Thank you”. Although the messages can be annoying when sent just for fun they can prove useful when one is in trouble and has no airtime. It also gives parents more of a reason to get mobile phones for their children without the real need for getting them airtime.
Safaricom launched the Kipokezi service in May 2000 that enabled its subscribers to send and receive email and online chat through standard mobile phones. The service does not require users to have an Internet connection as it uses ForgetMeNot Africa’s Handset Initiation technology. Prior to the service fewer than one in ten Kenyans had accessed the Internet but the Kipokezi launch allowed more than a third of the population to exchange email and online chat messages.
Lipa Mdogo Mdogo
In Partnership with Google, Safaricom introduced Lipa Mdogo Mdogo, a product targeting individuals with 2G phones by upgrading them to 4G enabled devices while paying daily installments of Ksh.20 over a period of one year.
Ndegwa who’s the CEO of the company pointed out that they are targeting 1 million customers with plans of rolling the service to other countries depending on its initial success.
Who Invented MPESA?
Jkuat student undertaking project – There was a story of a Jomo Kenyatta Institute of Agriculture and Technology (JKUAT) student circulating a few years back. The name of the student who invented Mpesa, or at least by his own right, is Nyagaka Anyona Ouko. The certificate of copyright he presented as evidence dates back to 2012; by then Mpesa was a force to reckon in the Kenyan economy. Ouko also claims that other Kenyans contributed to the founding of Mpesa. It is alleged the person who really invented Mpesa a JKUAT student undertaking his project.
This system is remotely comparable to hawala banking, but much better technologically. An M-PESA-enabled mobile phone can also function as an electronic wallet and can hold up to 145,000 Kenyan shilling (approx. US$1,000). Safaricom has announced that it intends to roll out M-PESA to other countries.
M-PESA (M for mobile, pesa is Swahili for money) is a mobile phone-based money transfer, financing and micro financing service, launched in 2007 by Vodafone for Safaricom and Vodacom. M-PESA was originally designed as a system to allow microfinance-loan repayments to be made by phone, reducing the costs associated with handling cash. After the pilot testing it was broadened to become a general money-transfer scheme. since then safaricom m-pesa brand has reached 12 countries in Africa and three countries outside the continent.
Safaricom House, Waiyaki Way, Nairobi
||Public limited company
||Safaricom House, Westlands, Nairobi, Kenya
|Peter Ndegwa, CEO
||G.S.M related products and Mobile Money Transfer
- Mobile Telephony
- Mobile Money transfer
- Consumer electronics
- Cloud computing
- Music Streaming
- Fibre Optic
|| KES240.3 Billion (2019)
| KES79.91 Billion (2019)
| KES63.4 billion (2019)
Number of employees
How it works
Once a user registers for M-PESA, they pay money into the system by handing cash at an M-Pesa agent, who then credits the money to the user’s M-Pesa account. The user then gets an SMS notifying them of the transaction.
A user withdraws money by visiting an agent, who checks that the user has sufficient funds before debiting the user’s account and handing over the cash. An M-Pesa user can also transfer money to others using a menu on their phone. Cash can thus be sent one place to another instantly, safely and easily. This is in contrast to the preferred system before where money was sent by a porter, usually a friend, relative or bus crew, to the intended recipient.
M-PESA was first launched by the Kenyan mobile network operator Safaricom, where Vodafone was technically a minority shareholder (40%), in March 2007. M-PESA quickly captured a significant market share for cash transfers and grew to 17 million subscribers by December 2011 in Kenya alone
The growth of the service forced formal banking institutions to take note of the new venture. In December 2008, a group of banks reportedly lobbied the Kenyan finance minister to audit M-PESA, in an effort to at least slow the growth of the service. This ploy failed, as the audit found that the service was robust. At this time, The Banking Act did not provide the basis to regulate products offered by non-banks, of which M-PESA was one such very successful product. As at November 2014, M-PESA transactions for the 11 months of 2014 were valued at KES. 2.1 trillion, a 28% increase from 2013, and almost half the value of the country’s GDP.
On November 19, 2014, Safaricom launched a companion android app Safaricom M-Ledger for its M-PESA users. The application, currently available only on Android, gives M-PESA users a historical view of all their transactions.
M-Pesa’s usage and success in Kenya
M-Pesa has been particularly successful in Kenya, compared to mobile money platforms in other countries. Contributing factors here include the exceptionally high cost of sending money by other methods; the dominant market position of Safaricom;the regulator’s initial decision to allow the scheme to proceed on an experimental basis, without formal approval; a clear and effective marketing campaign (“Send money home”); an efficient system to move cash around behind the scenes; and, the post-election violence in the country in early 2008.
During the post-election violence, M-Pesa was used to transfer money to people trapped in Nairobi’s slums at the time. Some Kenyans regarded M-PESA as a safer place to store their money than the banks, which were entangled in ethnic disputes. Having established a base of initial users, M-PESA then benefited from network effects: the more people who used it, the more it made sense for others to sign up for it.
M-PESA has since been extended to offer loans and savings products, and can also be used to disburse salaries or pay bills, which saves users further time and money as compared to doing so from banks.
M-PESA has a wide range of financial services including Person to Person, ATM withdrawal, Payments, Bulk Payments and Bank to M-PESA
As of January 2016, M-Pesa is used by 21.8 million Kenyans, with over 1.5 million of M-Pesa users using the bill payment feature. At the time M-Pesa had a network of over 90,000 agent outlets.
Average value of monthly person to person transfers on M-Pesa was Kshs 106B while Person to Business transfers were at Kshs 23.5bn and Business to Person at Kshs 27.8bn per month.
M-Pesa is in partnership with a number of banks. M-Shwari and KCB M-Pesa are two such services, which provide access to savings and loans to users. M-Shwari was launched in November 2012 in partnership with Commercial Bank Of Africa.
||This is a banking product exclusively for M-PESA customers provided by Commercial bank of Africa (CBA) in partnership with Safaricom. M-Shwari provides financial access to millions of Kenyans who previously had no access allowing them access micro savings and micro credit straight from their phones.
|M-Shwari Lock Savings
||This is a savings account that allows M-Shwari customers to save fund for a defined purpose, for a specified amount and within a specified period
|M-PESA Sure pay
||Safaricom launches a new service
that allows organizations
such as World Food Programme
to track funds send to beneficiaries via M-PESA
|M-PESA and Vodacom Tanzania partnership
||M-PESA customers now able to
send and receive
money to and from Tanzania
||Safaricom and KCB launched a
mobile savings and loan product
|Lipa Stima Service
||Okoa Stima allows one to borrow
any amount they require based on a
predetermined limit given by their historical
relationship with Kenya Power & pay their
post pay or prepaid KPLC
bills by dialing *885# from the mobile.
|M-PESA G2 platform
||Migration of the current M-PESA
G1 platform to allow an enhanced
G2 platform that will allow for faster
transactions, improved stability as
well as enable more functionality from the service.
||Safaricom partners with the Government of
Kenya to provide one Paybill number 206206
for use in payment of government services
through the governments e-citizen platform
|Realtime settlement (RTS)
||A service that allows partners to receive
funds after withdrawal from their merchant
tills real-time in their bank account
So far 17 banks have been on boarded for the RTS service:
- Equity Bank
- Kenya Commercial Bank
- Co-operative Bank
- Diamond Trust Bank
- NIC Bank
- Standard Chartered Bank
- Consolidated Bank
- CFC Stanbic Bank
- National Bank of Kenya
- Chase Bank
- Bank of Africa
- Gulf African Bank
- Commercial Bank of Africa
- First Community Bank
- Credit Bank Kenya
- United Bank For Africa
- Jamii Bora
|1st M-PESA developers initiative
||Safaricom opened up the API for M-PESA to
third-party developers, a move that will
encourage innovation and attract more
traffic onto the mobile money system.
||Safaricom in partnership with the government
launched a product that allows Kenyans to be
able to open Central Bank depository accounts f
rom their phones without visiting a bank
or broker, and can then buy government
paper for as little as Sh3,000 shillings
||A service that allows customers to confirm
the name of the recipient before sending funds,
withdrawing funds and paying bills
|New KCC cashless solution
||Safaricom formed a partnership with Kenya
Co-operative Creameries (KCC) to deploy a
cashless payments service to enhance business
efficiency and address the risks associated
with cash handling. Through a mobile application,
over 200 sales and distribution agents for
New KCC will be able to place and process orders,
access live delivery reports, create invoices
and make payments. The app will also generate
regular reports to ensure accountability and for record keeping.
||This is a mobile centric platform approach that
seeks to provide better coordination of Health
care services between payers, patients and providers
||A customer is able to access their M-PESA
statements by dialing *234# from their handsets
and follow prompts to enter the preferred email
address to which they would like their M-PESA
statements sent. Customers have an option of
accessing one-off statements for 3; 6 or 12 months in one go.
|Lipa Na M-PESA
||Safaricom Lipa Na M-PESA merchants hit 36,000
|International Money Transfer
||This service allows anyone wishing to send
money to Kenya to visit a Safaricom IMT
partner and send money to an M-PESA
mobile phone in Kenya. The transaction is similar
to a traditional cash-to-cash money transfer,
except that the sender specifies the recipient’s
mobile phone number at the time the funds
are sent. Recipients in Kenya must subscribe
to the M-PESA service through Safaricom
to access the service.
||M-PESA 1Tap is the faster way to pay with MPESA.
Using a card, phone sticker or wristband device
that is connected to your M-PESA account, you can
easily and securely make Lipa Na M-PESA Buy
Goods and Services payments. With
M-PESA 1Tap, you simply tap, enter PIN to pay and go!
||M-PESA Global enables M-PESA registered
customers to send and receive money globally.
M-PESA customers will be able to send funds;
To East Africa: Rwanda, Tanzania & Uganda Globally:
To millions of Bank accounts and over
500,000 Western Union locations globally.
PayPal: M-PESA registered customers will receive
the funds from abroad on their M-PESA account.
M-PESA customers can access the service
by dialling *840# >Accept terms and conditions to
Opt in > Select send money abroad on mySafaricom App.
|Safaricom Neon Smartphones
||Safaricom Neon phones are low cost ,
entry smartphones costing below Kenya shillings 5,000
marketed by Safaricom designed to have more
Kenyans move from feature phones to smartphones.
Since 2018, they’ve launched many models including:
Neon Kicka, Neon Ray, Neon Storm and Neon Ray Pro
In September 2010 Vodacom and Ned bank announced the launch of the service in South Africa, where there were estimated to be more than 13 million “economically active” people without a bank account. M-PESA has been slow to gain a toehold in the South African market compared to Vodacom’s projections that it would sign up 10 million users in the following three years. By May 2011, it had registered approximately 100,000 customers. The gap between expectations for M-PESA’s performance and its actual performance can be partly attributed to differences between the Kenyan and South African markets, including the banking regulations at the time of M-PESA’s launch in each country. According to Money Web, a South African investment website, “A tough regulatory environment with regards to customer registration and the acquisition of outlets also compounded the company’s troubles, as the local regulations are more stringent in comparison to our African counterparts. Lack of education and product understanding also hindered efforts in the initial roll out of the product.” In June 2011, Vodacom and Nedbank launched a campaign to re-position M-PESA, targeting the product to potential customers who have a higher Living Standard Measures (LSM) index than were first targeted.]
Despite efforts, as at March 2015, M-PESA still struggled to grow its customer base. This comes as no surprise as South Africa is well known for being ahead of financial institutions globally in terms of maturity and technological innovation. According to Genesis Analytics, 70% of South Africans are “banked”, meaning that they have at least one bank account with an established financial institution which have their own banking products which directly compete with the M-PESA offering.
M-PESA was launched in Tanzania by Vodacom in 2008 but its initial ability to attract customers fell short of expectations. In 2010, the International Finance Corporation released a report which explored many of these issues in greater depth and analyzed the strategic changes that Vodacom has implemented to improve their market position. As of May 2013, M-PESA in Tanzania has five million subscribers
M-PESA, was launched in India as a close partnership between Vodafone India and ICICI bank in November 2011 under the leadership of Mr Suresh Sethi. The service today operates in all telecom circles where Vodafone India is present. Users (of any telecom operator) can activate the M-Pesa service by downloading the Vodafone M-Pesa app (available on all app stores) on to their phones and registering themselves or by visiting any Vodafone store, Vodafone mini-store or M-Pesa agent point across the country. Customers of Vodafone can also activate the M-Pesa service by dialing *400# from their mobiles and completing the registration process. Using the *400# (USSD) facility allows Vodafone customers to avail of the benefits of M-Pesa without having a smartphone or a data connection. Registration is entirely free of charge.
A customer who activates his M-pesa wallet by only providing his basic demographic details and not sharing any proof of identity is enabled as a minimum KYC customer on M-Pesa. A minimum KYC customer of M-Pesa can not do money transfer (P2B, P2P) from his wallet account but can avail services like recharges (Prepaid mobile/DTH), bill payments, merchant payments, EMI payments, utility payments, insurance payments etc. They also have a monthly /daily/per transaction limit of 10000 Indian Rupees. If a minimum KYC M-Pesa customer wants to avail of bank transfer facility/increase his or her monthly transaction limit, then he or she can do so by doing their KYC using their Aadhar at any Vodafone store or M-Pesa agent point.
M-Pesa in India operates under two licenses, the PPI (Prepaid Payment Instruments) license issued by the Reserve Bank of India and the business correspondent license issued by ICICI bank. M-Pesa has also received in -principle nod of the regulator to set up a payments bank in India. Vodafone M-Pesa is the largest business correspondent channel in India with 1.5 lac+ M-Pesa agents who are enabled to provide cash-in, cash-out and assisted payments facility to M-Pesa customers.
In 2008, reports appearing in the cross section of the press indicated that Vodafone Plc of UK only owned 35% while the remaining 5% was owned by a little-known company, Mobitelea Ventures Limited. The reports caused a stir which led to the summoning of its CEO Michael Joseph to appear before the PIC “Public Investment Committee”, where he denied knowing who the other shareholder is. A spokesman for Vodafone said “the PIC has no powers to investigate M&A activity (see Mergers and Acquisitions), only to ask to view company accounts of Vodafone Kenya Limited, a company registered in Kenya. Mobitelea Ventures Limited were granted an option to purchase 25% of Vodafone’s shares which they completed in 2002, Vodafone bought back half of the stake in 2003 for $10 million, and in the financial year ending 31 March 2009 purchased the remaining indirect equity stake of 5%, thus returning Vodafone to its original 40% stake-holding. Vodafone said that whilst it would like to disclose who owns Mobitelea it is unable to because of a confidentiality agreement.
As of December 2017, the company’s stock was owned by the following public and private entities. The stock of the company is listed on the Nairobi Stock Exchange, where it trades under the symbol: SCOM.
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