By Paul Ndiho
Kenyan telecom giant Safaricom wants to meet the growing demand for internet connections and online streaming services. Until recently, the company had been focusing on mobile money, but now things are changing.
When the name Safaricom is mentioned, many Africans immediately think of mobile money, Kenya’s most successful innovative mobile phone money transfer technology called mPesa. This technology is transforming the lives of millions of people and it has made paying for services and merchandise through your mobile phone very easy. To compete as an industry leader on the continent, Safaricom is reallocating funds to build up its fixed-data network, to connect homes to the internet, as demand for online streaming services like Netflix, grows. Chief executive officer Bob Collymore.
“We have been a bit lazy in growing our data business… you know the half year we showed it was something like 40 – 43 percent growth. If you look across the continent, that is a little bit, we are a little bit of laggards; the continent growth and data is probably being closer to 51 – 52 percent. Across the world is like 60 – 62 percent, so I think we can do better in this and that suggests therefore that the data potential in the market is huge.”
Collymore says their investment in the fixed-data network is a reallocation of its budget and it will not add to its planned expenditures.
“People want to have ideally unlimited data. Unlimited data on mobile is not economically viable in the long term so we are using fixed to give you the data access in the home and when you are roaming. What we are finding out is lots of solutions now for delivering data to customers. A lot of competitors are out there, people don’t want to fixate on the big three but there are a lot of guys who are providing now the Wi-Fi,” Safaricom has already connected nearly 6,000 homes to its new fixed-data network, using underground fiber lines and the more traditional overhead data poles. He said the move was driven by growing local demand to download or stream content such as Netflix’ science fiction drama Sense 8, which has some scenes shot in Kenya. To recruit new customers in Kenya, Safaricom has also partnered with ShowMax, an Internet-based video streaming service owned by South Africa’s Naspers, a broad-based multi-national internet and media group headquartered in Cape Town, South Africa.
“People don’t want to just have access to the internet, they also going to want to be downloading content and if you are downloading content, you are downloading movies. Even with short clips on mobile data is going to be relatively expensive. We are kind of pretty close to our cost base on our price of data, so we can’t really go as lower than that at the moment. Over time we might come low. So we want to give people solutions they can use, you know? You can access a Netflix movie or Showmax movie whether it’s on a TV, on a table or a phone,”
Kenya is among 130 countries that can now access internet streaming services from Netflix. Safaricom hopes to bank on the success of its mobile money transfer technology to tap into the growing demand for online streaming services.
Economic analysts say some of the factors behind Safaricom’s success cannot be copied; but others can, possibly allowing for other African companies and countries to follow Kenya’s pioneering internet building example. Safaricom has already spent $25 million on a license for the fourth generation — 4G — network that it has rolled out to Kenya’s major urban centers.