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03 November, 2010

Safaricom's Next Chapter.

After celebrating its 10th anniversary safaricom is now expected to face a very challenging future, having dominated  Kenyans telecommunication sector for a very long time.The new CEO ,bob collymore ,who replaced the long serving  Michael Joseph who many view as the brainchild of the company ,will have to wade through increasing competition from major telecom companies trying to get a slice of safaricom's market share against a plateau on voice revenue.

Safaricoms future depends on how the company handles this areas.

Product innovation/Research and development 

As a company that has thrived on innovation I think the company can make a foray in the provision of solutions which they have perfected over the years, for instance the M-pesa and M-kesho solutions.The company should  work closely with techie community to come up with solutions which can add value to the community as well as the company's  bottom line.
Having tapped into the financial service provision I think the next phase should be nano insurance and health provision through mobile phones.This services are the future of telecommunication.

Although safaricom has the widest distribution network there is a need to ensure quality service  is assured on all those outlets as well as enhance the channels of distribution to match customer expectations.There has also been a tendency to discriminate against lowly populated areas such that most of its distribution channels are based in urban areas therefore making it difficult for rural customers to access telecommunication services.

The quality of safaricom service is quite low, complaint of poor reception,overcharging,call dropping and congestion are a common occurrence, this should be at the top of the new CEOs priorities, I believe this has been one of the leading cause of high customer churn rate at this company.

Data charges
Having lost the low cost tag from its rival Zain the new CEO should make a name in the data segment as the lowest priced  data vendor.Safaricom has an advantage as it was awarded the 3g licences two year before its rival.So most of its investment has been recouped.

The company through M-pesa has collaboration with many corporations, but more is required to be done to enhance its market share.Through collaboration with Google and Facebook the company tries to make its customers utilize the 3g spectrum which at the moment has the lowest penetration in the country at about 10%.
The only way the company can maintain this market is by reducing its charges and enhancing its system to accommodate more calls termination.The competition for this segment is so stiff such that, unless the charges are competitive the company will loose its market share.