Safaricom Public Limited Company, is a leading mobile network operator in Kenya. It 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. On 28th February 2018, Safaricom changed its name in compliance with section 53 of the Companies Act, 2015. The company will now be Safaricom PLC instead of Safaricom Limited with effect from January 31, 2018. As of December 2, 2016, Bob Collymore was the CEO; he succeeded Michael Joseph on November 1, 2010, after Joseph's ten years as Safaricom CEO. Collymore has spent most of his career in the telecommunications industry starting with British Telecommunications, where he held a number of marketing, purchasing and commercial roles over a 15-year period. Recent reports appearing in the cross section of the press indicate that Vodafone Plc of UK only owns 35% and the remaining 5% is owned by a little-known company, Mobitelea Ventures Limited. The reports have caused a stir which led to the summoning of its CEO Michael Joseph to appear before the PIC "Public Investment Committee", during which 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.
Safaricom House, Waiyaki Way, Nairobi
|Public Limited Company; owned by Vodacom 35%, Permanent Secretary (The Treasury) 35%, Vodafone 5% & retail investors 25%|
|Sateesh Kamath, CFO|
|Products||G.S.M related products and Mobile Money Transfer|
|Revenue||KES212,885 Billion (2017)|
|KES70,375 Billion (2017)|
|KES48,444 billion (2017)|
Number of employees
Safaricom maintains its headquarters in Safaricom House, Waiyaki Way in Westlands, Nairobi, about 6.2 kilometres (4 mi), by road north-west of the city center. The geographical coordinates of the company headquarters are:01°15'33.0"S, 36°47'10.0"E (Latitude:-1.259167; Longitude:36.786111). It maintains other offices in the city of Nairobi and in the major urban centres in Kenya, including Mombasa, Eldoret, Nakuru and Kisumu.
As of December 2017[update], Safaricom employed over 5,000 people, of whom 75 percent were based in Nairobi, with the remainder based in other big cities like Mombasa, Kisumu, Nakuru and Eldoret, in which it operates retail outlets. Currently, it has nationwide dealerships to ensure customers across the country have access to its products and services. As of December 2015, Safaricom had a subscriber base estimated at approximately 25.7 million.
In November 2012, Safaricom announced it would be offering a new mobile phone banking product in conjunction with the Commercial Bank of Africa, tapping into an underdeveloped financial services market.
Safaricom was started in 1993 as a department of the former state-owned telecommunications company, Kenya Post and Telecommunication Corporation. In 1997, Safaricom Limited was incorporated as a private limited liability company with 40% ownership held by Vodafone Kenya Limited. In 2002, it was converted to a public company while the government held 60% of the shares, 25% of which was auctioned off in 2008 on the Nairobi Stock Exchange. Safaricom is the leading telecommunications service provider in Kenya, controlling 66.3 percent of the market as at September 2015.
As a result of the limited income of 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 pre-defined 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.
Electronic cash serviceEdit
The service does not require users to have bank accounts, an important aspect in a country like Kenya, where many people do not have bank accounts. With M-PESA, the user can buy digital funds at any M-PESA agent and send that electronic cash to any other mobile phone user in Kenya, who can then redeem it for conventional cash at any agent. This system is remotely comparable to hawala banking or services like Western Union. An M-PESA-enabled mobile phone can also function as an electronic wallet and can hold up to 100,000 Kenyan shilling (approx. US$1,000). Safaricom has announced that it intends to roll out M-PESA to other countries.
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.
Safaricom together with many other companies have partnered come up with different services for use by the public ranging from weather updates to market prices and even entertainment updates. The company has plans to provide Wi-Fi internet connection in large malls, SMEs and government agencies in Kenya 
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.
How it worksEdit
Once a user registers for M-PESA, they pay money into the system by handing cash to 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 KenyaEdit
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 benefitted 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 achieves financial inclusion through the provision of solutions 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||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.||Nov 2012|
|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||June 2014|
|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||March 2015|
|M-PESA and Vodacom Tanzania partnership||M-PESA customers now able to send and receive money to and from Tanzania||March 2015|
|KCB M-PESA||Safaricom and KCB launched a mobile savings and loan product||March 2015|
|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.||April 2015|
|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.||April 2015|
|E Citizen||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||April 2015|
|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:
|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.||September 2015|
|M-Akiba launch||Safaricom in partnership with the government launched a product that allows Kenyans to be able to open Central Bank depository accounts from their phones without visiting a bank or broker, and can then buy government paper for as little as Sh3,000 shillings||September 2015|
|Hakikisha||A service that allows customers to confirm the name of the recipient before sending funds, withdrawing funds and paying bills||October 2015|
|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.||November 2015|
|M-Tiba||This is a mobile centric platform approach that seeks to provide better coordination of Health care services between payers, patients and providers||December 2015|
|M-PESA Statements||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.||January 2016|
|Lipa Na M-PESA||Safaricom Lipa Na M-PESA merchants hit 36,000||February 2016|
|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.||*|
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 with ICICI bank in November 2011. Development for the bank began as early as 2008. The service continues to operate in a limited geographical area in India. Vodafone India had partnered with both ICICI and ICICI bank, ICICI launched M-PESA on 18 April 2013. Vodafone plans to rollout this service throughout India. The user needs to register for this service by paying 100 Rupees, on which 25 Rupees will be credited back to the users account and there are charges levied per M-PESA transaction for money transfer services and DTH and Prepaid recharges can be done through M-PESA for free.
Safaricom has been accused of unfair competition and has tried to discredit its competitors in recent years.
It was the first company in East Africa to possess 3G Internet technology with recent success of 4G / LTE connectivity currently in all major Kenyan cities.
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. Airtel and Telkom Kenya have expressed dissatisfaction with the way the regulatory body Communications Authority of Kenya, awarded Safaricom its LTE license to operate at 800 MHz.
As of December 2017[update], 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.
|Rank||Name of Owner||Percentage Ownership|
|1||Government of Kenya||35.0|
|2||Vodacom of South Africa||35.0|
|3||Vodafone of the United Kingdom||5.0|
|4||Retail investors via the Nairobi Stock Exchange||25.0|
- Majithia, Kavit (17 November 2011). "Safaricom: Investing in Africa". London: Capacity Media. Retrieved 15 December 2017.
- Obura, Fredrick. "Safaricom changes name in compliance with regulations". The Standard. Retrieved 2018-02-28.
- Emmanuel Toili (22 July 2010). "Collymore Next Safaricom CEO". Daily Nation. Nairobi. Retrieved 15 December 2017.
- White, Dominic (17 February 2007). "Investigation into Vodafone's mystery partner in Kenya". The Daily Telegraph. London. Retrieved 15 December 2017.
- Vodafone (31 December 2009). "14. Investments in associated undertakings - Notes to the consolidated financial statements - Financials - Vodafone Annual Report 2009". London: Vodafone Plc. Retrieved 15 December 2017.
- GFC (15 December 2017). "Distance between Nairobi Central, Nairobi, Nairobi County, Kenya and Safaricom House, Nairobi, Kenya". Globefeed.com (GFC). Retrieved 15 December 2017.
- "Location of Safaricom Headquarters, Safaricom House, Waiyaki Way, Westlands, Nairobi, Kenya". Retrieved 15 December 2017.
- Abuya, Kenn (7 June 2017). "Safaricom Opens Fourth Headquarter in Kisumu, Starts Rolling Out FTTH Solutions to Residents". Nairobi: Techwez.com. Retrieved 15 December 2017.
- Riaga, Odipo (23 May 2016). "Safaricom Numbers 2016 – How big is Safaricom?". Nairobi: Kachwanya.com. Retrieved 15 December 2017.
- Mwanza, Kevin (27 November 2012). "Kenya's Safaricom revamps mobile phone banking with CBA". Reuters. Retrieved 15 December 2017.
- CNBC Africa (16 January 2016). "What you should know about East Africa's largest listed company". Johannesburg: CNBC Africa. Retrieved 15 December 2017.
- Nation Reporter (25 August 2005). "Kenya: Safaricom in New Method to Flash Callers". Daily Nation via AllAfrica.com. Nairobi. Retrieved 15 December 2017.
- Mason, Paul (8 January 2007). "Kenya in crisis". London: British Broadcasting Corporation (BBC). Retrieved 15 December 2017.
- Business Today Reporter (14 June 2017). "Safaricom to roll out M-Pesa across Africa". Nairobi: Business Today. Retrieved 15 December 2017.
- ITN News Africa (28 May 2010). "Safaricom brings Mobile Email and Online Chat to subscribers in Kenya". ITN News Africa. Retrieved 15 December 2017.
- Julian (14 May 2014). "Safaricom Launching Wi-Fi In Malls In Kenya". Nairobi: Naibuzz.com. Retrieved 15 December 2017.
- Ochieng, Lillian (20 July 2015). "Equity Bank, Airtel team up to launch free money transfer". Daily Nation. Nairobi. Retrieved 15 December 2017.
- Chapman, Sophie (11 December 2017). "Safaricom's 4G network is now available in all Kenyan counties". Johannesburg: African Business Review. Retrieved 15 December 2017.
- Kamau, Scola (11 April 2015). "Safaricom gets headstart in scramble for frequencies". The EastAfrican. Nairobi. Retrieved 16 December 2017.
- Okuttah, Mark (3 September 2015). "Why Airtel wants a share of Safaricom 4G frequency". Business Daily Africa. Nairobi. Retrieved 15 December 2017.
- Nic Fildes, and John Aglionby (15 May 2017). "Vodafone transfers stake in Kenya operator Safaricom to Vodacom". Financial Times. London. Retrieved 15 December 2017.
- Juma, Victor (1 June 2017). "Safaricom rallies to record Sh900 billion market value". Business Daily Africa. Nairobi. Retrieved 15 December 2017.