To survive changing times, businesses can borrow a leaf from Safaricom

Safaricom Limited is Kenya’s, indeed, East Africa’s leading provider of converged communication solutions. Formed in 1997 as a fully owned subsidiary of Telkom Kenya, the telecom giant entered the market with hardly three products to offer; voice and text. In May 2000, Vodafone Group Plc of the United Kingdom acquired a 40% stake and management responsibility for the company.The growth of Safaricom into the giant it is today, the axe of being declared a dominant player by the sector regulator hovering around its neck for operating way above its competitors is fascinating. From the five common product segments of yesteryears – simu ya jamii, the ground breaking M-pesa, prepaid, postpaid, business and enterprise, international roaming data and messaging, Safaricom has churned out ingenious products year in year out, most of which being the first of their kind in the market. 

It has the biggest outlet of top brand, genuine mobile phone handsets. It has partnered with all leading banks with an eye on mobile phone money transfer, grown an unrivalled Internet provision base and has now plunged into the broadcast digital transmission foray with the Big box, rattling the old industry players who had taken it as their entitlement.  Safaricom did not take their leading position in the market for granted. They have always ensured they stay ahead of the park in innovation, which they have done boldly even as they fended competition that come in all forms including price wars. 

“I took an early position that the price wars were not sustainable, and made a firm decision to strike the tricky balance between offering a competitive price to customers that would also enable us to earn a margin in order to continue to invest significantly in the network. The toll of that price war was seen in the losses that some players experienced at the time and it continues to be felt to this day,” Bob Collymore told our writer recently in an interview carried elsewhere in this Issue.

Several lessons to be learnt from the success story of Safaricom: As a business entity, be always on the lookout of emerging trends in your line of business and ensure you are among, if not the first to exploit them. It is no longer about sticking to one line of business. The volatility of technological advancement favours only the versatile. 

We have seen Kodak, the World-renowned name in photography fold for lack of foresight. Closer home, Everyday has had to close shop for staying pretty in its comfortable zone. The scare in Kenya’s mainstream broadcast industry resulting in their attempts to forestall digital migration was as a result of lack of preparedness on the leading three broadcasters on how  to operate, and retain dominance in the new, emerging order.

The second and, probably the most invaluable lesson is; stability in business management is key. For the near 20 years Safaricom has operated, there has only been one change of the button, and it was smooth. Boardroom wrangles ending up in leadership coupes witnessed in most parastatals and family-led businesses can only ruin business. Mr Collymore’s term has been extended for two years, in the same fashion as  his predecessor’s. It is a show of confidence in the management team by the board, which in the end helps streamline transitions. Every business, especially those in the service industry, looking to be around longer should take a leaf from Safaricom.

 

David Wanjala

 

MANAGING EDITOR

 

— david@nairobibusinessmonthly.com

 

 

Sign Up