Today, 1st April 2020, is a historic moment for Safaricom Plc, Kenya’s leading mobile operator. The management of the company is changing guard – from the hands of foreigners (acting CEO Michael Joseph) to a Kenyan son, Mr Peter Ndegwa.
It has been a long wait, five months since his appointment in late October 2019, after almost two years of searching, punctuated with grandstanding, ego f****s and boardroom drama. He should make this wait worth it.
Sentimentally, having a Kenya helming Safaricom is a great thing. The most successful company in the region – both in terms of profits and innovation – being led by one of our own is something to be proud of.
Strategically, however, it is a gamble, but one worth taking. Safaricom is not just any company. It is a valuable asset for Kenya and Kenyans. First, it is listed at the Nairobi Securities Exchange (NSE), with thousands of Kenyans holding stock less for investment than emotional attachment.
Second, Safaricom is a money machine. It’s not just the most profitable; the company sets earnings record every other year, with its net profits beating the valuation of most companies at the NSE. In the year ending March 2019, it returned a profit of Ksh63.4 billion, a fete never before achieved by a Kenyan company.
Third, and perhaps more important, is that Safaricom has over 30 million customers on its network for voice, M-Pesa and data services. It carries their personal details, more so their biodata. In this era where big data is a pricey commodity, Safaricom’s database is a goldmine.
Businesses, politicians and even NGOs would love to have that data for marketing and strategic reasons. The temptation to trade it in can be hard to resist.
Play by the rules
These are the key things that Mr Ndegwa will need to place his hands firmly on. Having experience in the international market is a plus, but he will need to adjust to playing in a local market where international best practices are alien. Where those who play strictly by the rules are often frowned upon and, in the case where government has a hand, hounded out of office.
There has been already talk of breach of data privacy by Safaricom, with some users moving to court. Mr Ndegwa should dig his teeth in this and seal the loopholes of those abusing privacy, both internal staff and their paymasters. This will restore trust.
The innovation train will need more fuel and more creative technicians as well. Competition is growing in the market and with its rivals, Airtel and Telkom, are plotting a j***t venture, Safaricom cannot afford to sit pretty. Sabotage will be rife, especially from senior managers from inside who feel sidestepped in the Bob Collymore succession. Political influencers and dealmakers will swing in.
That’s why Ndegwa will have to play his cards well to have a cohesive team and keep the Safaricom integrity above the table.
Ndegwa is the third chief executive of the company after Michael Joseph (2000-2010 ) and the late Bob Collymore (November 2010-July 2019 ). These two gentlemen’s shoes were big. Ndegwa should, in fact, get his own shoes and give Safaricom not only a local touch in management, but a new strategic direction.
Build or b**w it
Safaricom has 34.1 million subscribers in the Kenyan market that has a total subscription of 53.2 million, according to Communication Authority data. It is followed by Airtime with 14 million subscribers, Telkom (3.3 million) and Equitel with 1.7 million.
Peter Ndegwa is now carrying the hopes and fate of these millions of Kenyans, including foreign investors, on his shoulders. He should inspire rather than shudder them. He has the qualifications and experience to move Safaricom from good to great.