HomeOPINIONAt Safaricom, reputation comes before revenue

At Safaricom, reputation comes before revenue

[dropcap]A[/dropcap]lbert Schweitzer, a 19th century Christian leader once said: “The purpose of human life is to show compassion, and to have a will to help others.”

This may seem like a strange quote for us to think about at a financial results event, but lets take some time to reflect on the essence of the sentence.

If applied to a company, the quote would capture our ambition here at Safaricom. Safaricom exists to fulfil a purpose. We believe that purpose is to Transform Lives, and at the core of those two words lies our hope to help others

We are not a philanthropic business, but we are a business that is fully aware that we cannot grow without being responsible to our customers. We want to build a sustainable company – one that will be able to adapt and acclimatise to a rapidly changing world.

Which is why we have made a conscious choice to put Reputation before Revenue, meaning that we think about how to be more ethical rather than extractive.

While we have always had this mind-set, we are now ensuring that we embed it into our day-to-day thinking and committing to it at a personal level. We have also made a more conscious choice to put our People and our Purpose before Profits.

What this means is that we know that we cannot become a sustainable enterprise unless we take care of the people who run the organisation. We ask all our people to subscribe to the view that we are here to Transform Lives, because we believe in the power of collaborative effort to build a better Kenya. And we do this because we truly believe that creating a more Purposeful business will create a more successful business for our shareholders.

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These are the guiding principles that led us to start thinking about our brand earlier this year. This means that in some shape or form, nine out of every ten of you has been part of incredible transformation that the mobile phone has brought to Kenya.

At Safaricom, we have spent the last 17 years trying to realise a uniquely Kenyan dream – that when we come together, we can do great things. As you know, that voyage has been filled with a myriad of milestones and achievements that we never could have achieved alone.

We have a hustle in our soul

This year, we started to think about what our shared dream for Kenya will look like in the next 17 years. And we came to few realisations. We know that our future is intimately tied to the future of Kenya.  We are here for you. We exist because of you. And we are here to stay. For you. We want to work alongside our customers to meet their dreams and aspirations. Because we know that Kenya is bubbling with possibility. We have a hustle in our soul, and we carry optimism in our heart.

We call this new spirit TWAWEZA, and it is anchored in the brand belief that when we come together, we can do great things. Sometimes, all we need is that helping hand to realise those aspirations. In many ways, that helping hand has been the mobile phone.

At Safaricom, we believe that many of the challenges that have traditionally shaped Kenya’s past also provide business with the biggest opportunity to make impactful investments in the future. To demonstrate the impact of this belief, allow me to share a few real-life stories of how our network is enabling more Kenyans to access more critical services. Over the last 17 years, we have continuously invested in building the strongest and most robust network in Kenya.

This has seen us improve our coverage from just 10 base stations to over 4,600 sites today, with 1,400 on 4G. But this does not mean there are not still pockets of Kenya that do not have coverage. We recently connected the town of Bura to our 3G network. Bura is a growing town that is in the Tana delta.

For years, the town has tried to break free of the constraints that come with the lack of proper infrastructure. Residents in the town must walk for over 100kms to reach the nearest health clinic, Internet service or government agency. But with the new connectivity, one base station has brought all those services closer to the people.

It means that a mother can now Whatsapp a nurse to inform her on the progress of her pregnancy. A pastoralist can send photos of their livestock to a potential buyer.  It allows NGOs in the area to provide better reporting on agricultural and health projects, enabling them to become more efficient.

And, county workers in Bura do not have to travel two hours to the nearest town to send an email – which all of you can do right now. The transformation that this single base station has provided captures the spirit of our Twaweza vision to connect more people to each other.

At Safaricom, we also strive to connect people to enhanced opportunity. In 2013, a study commissioned by the Kenya ICT Authority found that government services were only accessible to around 20% of population. Today, through initiatives like eCitizen, the government has been able to digitize services and payments on a single platform that is accessible by citizens, businesses and visitors to Kenya from anywhere in the world.

To give you a practical example, I lost my ID a few days ago. I immediately started feeling deep dread once I started thinking about how I would have to travel to the nearest chief’s office, stand in line for hours, and maybe get my ID in nine months. But by using the portal, I was able to complete the process painlessly in less than 10 days.

This is where the convenience of having an easily accessible mobile payments service starts to go well beyond the more popular perception of person-to-person payments.

By allowing digital services and payments, the logistical challenges of managing multiple payment points, handling large volumes of cash, receipting and reconciling payments have been alleviated, streamlining service delivery for government agencies.

For example, improvements in collection, settlement and reporting that previously took six months to complete are now achievable every financial day. Enhanced governance structures and accountability has led to an increase in the number of citizens served, leading to an upsurge in revenue collection and improving operations to levels never envisaged. Citizens can track their passport application progress and can collect their passport within 10 days for new applications and four days for renewals, down from several months or weeks.

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They no longer have to travel long distances to access services or make multiple trips to government offices to check the progress of their applications, a situation which was sometimes marked with incidences of misplaced files and lost applications.  The role that services like M-PESA plays in these kind of critical ecosystems indicates that the future for the system goes well beyond person to person, or person to business payments. According to the GSMA, these kind of solutions are creating ease for users (93%), convenience (56%), and speed (48%).

Respondents in the GSMA survey chose to use mobile money to avoid long travel times to government offices, waiting in long queues and various forms of corruption. As we think about how to create a more sustainable economy, these kind of initiatives form the building blocks of our future growth.

We believe that sustainability is key to future of not just Safaricom, but the Kenyan economy as a whole. But we are aware that we are operating in an increasingly challenging business landscape.

The country continues to weather a troublesome drought, which has effectively reduced our ability to feed our population even as it puts millions more at risk.

GDP growth has slowed from 5.5% to a flat 5%, signaling the immense work the country must put over the next few months to restore the country to its previous growth trajectory.

High inflation rates are affecting the ability the purchasing power of customers across industries, and the reduced credit growth in the market is signaling more challenges for smaller businesses looking for loans.

Political events

The political events of the last few months have triggered the largest decline in our stock market in Africa over the last year.

Despite these many challenges, our business has been able to continue its robust growth.

At Safaricom, we believe that our strategy to put the Customer First, Deliver Relevant Products, and Enhance our Operational Excellence will continue to enable us to meet these operational challenges.

Over the year, we worked hard to build more personal relationships with our customers. We also made considerable effort to fix and fine tune our service delivery, by creating and launching new products that are transformative for our customers. This strategy has continued to grow our loyal customer base and produce excellent results across our key financial and commercial performance indicators.

Our strategy has empowered us with the ability to grow our subscriber base to 30 million. In line with our ambition to put the Customer First, we have diversified our route to acquisition by introducing Safaricom Mtaani, an initiative that sees us visit 120 markets every month in order to get closer to our customers.

This follows our decision to regionalise the business just over two years ago, and has formed a key component of our recruitment and retention strategy.

As our customers become more sophisticated, we are empowering them with the tools that can enhance their experience on our network.  The Safaricom App now has over 1.5 million active users, providing amongst other services, the ability to see who you send money to before the money is sent on M-PESA.

We continued to improve our customer experience on data by ensuring that more customers were able to control their use of Internet services.

With the understanding that one size does not fit all, we are creating more high-tech solutions for our customers such as Tunikiwa, which has attracted 30% of our customer base to enjoy personalized offers for voice and data.

A year ago, we announced M-PESA Kadogo, which scrapped fees for M-PESA transactions under Ksh 100.

We have noted that this move has increased our M-PESA transactions in that band, which now make up 11% of overall M-PESA transactions, up form just 1% this time last year.

In line with our vision to create more personalised relationships with our customers, Blaze, our flagship product targeting the youth segment, now has 1.8 million active customers, with a wider ecosystem of 26,000 youths being mentored through the Blaze Summits.

These initiatives, coupled with an aggressive expansion plan to expand the capacity of the call centre to handle more calls and offering customers more self-help options.

Reward loyalty

The continued aggressive increase in our customer care workforce is part of our ambition to make it easier for our customers to reach us when they have issues.

To ensure stickiness and reward loyalty, we also diversified the Bonga proposition to allow subscribers to use points for more than just network services. We believe that our fruits of these actions are the basis for our robust performance.

Our shareholders have responded by driving our share price to a record high of Ksh 27, buoyed by our strong management, commitment to being a sustainable business, and our keen understanding of the customer needs.

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None of these achievements would be possible without continuously investing in a network that can manage the rapidly changing needs of our customers.

We have effected the fastest ever rollout of 4G base stations as we attempt to keep up with growing demand for fast data services.

We are aware that sometimes, our rollout is not quick enough, which is why we continuously self-test to ensure that all our customers enjoy the best services from our network. We were extremely pleased that a month ago, Ookla rated us as the fastest network in Kenya.

This achievement is external proof of our belief that we are indeed putting the Customer First in all aspects, especially in the provision of voice, data and mobile money services.

This is an abridged version of Joe Ogutu’s talking points during the release of Safaricom’s half year results on Friday. 

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