[kictanet] "Talk to Safaricom" Responses to Supplementary Questions

[Stephen Chege]

Dear all

Below are the responses to the Supplementary Questions that have been asked following earlier responses. Again, please feel free to ask follow-ups.

As mentioned, it has been great engaging with you all. Walu and Grace over to you now for the next steps.

regards

Steve


Machuhi.
Good and well thought through responses except bundles expiry... not convincing. If bundles must expire, why not 'convert' them into airtime - you'd still have your revenue assured. Or create an Expired Bundles' Foundation and donate them to a cause of victim's choice. It does feel like theft--
Machuhi, thanks for your suggestion. However as I mentioned before, Safaricom is among the few operators that allows customers to “rollover” the expired resources only requiring you to top up your line to reactivate them.

Walu
@Steve, Still absorbing some of your responses. On affordability of data you wrote
Over the last 7 years, the price of data on our network has dropped by 80% for example, in 2010, one GB was Sh2,500 versus the current Sh500. Over the last year, we further reduced the price of data on our network by 37%. We keep on reviewing customer needs and react accordingly where we can. Data in Kenya is relatively more affordable than say South Africa (where 1GB is Sh582), US (where 1GB is Sh1,814) and in the UK (1Gb is Sh1,944).
It seems ITU has a different way of looking at affordability. They look at the monthly cost of entry level mobile data (500MB) as a percentage of the country's Gross National Income.
So whereas the cost in real terms for data in Kenya maybe equal to or less than what is charged in SA, UK or USA, the Kenyan citizen bears a bigger burden in accessing internet - given our lower income levels. Indeed from the Measuring Info Society 2016 report (pg136)<http://www.itu.int/en/ITU-D/Statistics/Pages/publications/mis2016.aspx>. ITU place the mobile data affordability for Kenya at 136 out the 178 global economies surveyed. What’s your take on this?

Interesting and valid perspective Walu. However it is also important to take into account the level of development and enabling environment (or lack thereof) of where the network is located. In Kenya, while you can enjoy the same 4G experience as say someone in say in New York, the cost of rolling out services here is prohibitively high as it is not a build-on on existing infrastructure but actual greenfield rollout. The cost of putting up BTS, wayleaves for backhaul fibre, microwave fees, high initial licence fees, spectrum usage fees all of which are paid to the Communications Authority, international access links, security e.t.c  I think our prices are competitive when compared to more mature markets that have more embedded infrastructure and which can leverage on pre-existing efficiencies.

@Steve: As you prepare to avail feedback on competition questions, kindly address this observation: The management of Airtel has been quoted as attributing their diminished fortunes to the acts/omissions of the regulator and Safaricom:
-Has the regulator by any chance shown more affection towards Safaricom than other players?

Walu, I think every operator can gripe about what the regulator has done to them or not done for them. I could state the things which we think our regulator has not done to facilitate further growth by Safaricom, but that is not how we operate. I will also not speculate about what the other companies may have said.

However I will say that if it is the expectation of any operator that the regulator represents their best chance to make a profit in any market then such an operator is seeking to use regulatory support to achieve the success that it should seek from the market. I firmly believe that it is not the role of any regulator to ensure that any operator makes a profit – that is the role of the market. The regulator’s role is to ensure that all players in the market have an equal opportunity to succeed and the necessary incentives to do so. The market will then decide which operator does and which one does not. Market entry and exit is a feature of competitive markets.

What word of encouragement do you have for your industry brothers who would like to be Safaricom at adulthood? Advice “roho safi"
Kamotho, we certainly do not see ourselves that way. But one insight that drives our company is the knowledge that Kenya is not a market that readily accepts ‘one size fits all’ solutions – to make it here, you must consistently focus on the customer and provide solutions that meet the unique needs of this market. The other one is investment. If you invest in your network you are likely to grow and this will fuel further investment and more growth.

Still wondering if there will ever be an M-PESA app-Sidney Ochieng
As mentioned in my earlier response, we are in the advanced stages of trialing an M-PESA App which will be part of the Safaricom App we have already released.

Mwendwa Kivuva
Thanks you Steve for bringing this up. Under which law will CA be implementing a monitoring system on Operators' platforms? As far as my little legal knowledge stretches, any intent to access citizen's private data can only be accompanied by a court order (court of competent jurisdiction they say), and the access cannot be in perpetuity. It can only be for a specific finite task, mostly investigation. I hope CA can also respond to this.
Mwendwa, in all fairness I would direct that question to the Communications Authority. I would further add that what I stated earlier was that there should be more robust public debate on the issue. In the current dispensation it is not enough to ‘engage’ the operators alone but the people whose confidential information is affected as well.

George Sidney Ralak
I've been on postpaid since 2013, all that time, I have been receiving 100 Mbs per month, we are now in 2017, is there a way Safaricom can add the amount of bundles it gives to its postpaid customers? 100 Mbs cannot even last one day and to make it worse it, there is no way one can sambaza bundles to a postpaid number. Since I rarely exhaust the voice bundles given to me, maybe there should be a plan to choose which bundles to receive more than the other. Lastly, to those unused voice bundles at the end of every month, instead of just wiping them out, and you don’t carry them forward like you used to anymore, why don't you convert them to Bonga points instead.-
There are a number of PostPay plans that are designed to satisfy the various needs of our customers. Our PostPay Advantage team will reach out to you on this query. Going forward, we are preparing an exciting new proposition that will allow you to decide for yourself what you want to do with resources you have purchase from us.

Henry at article19.org<mailto:enry at article19.org>
I am interested in knowing if Safaricom will be publishing any transparency report soon? Secondly, how many government requests for user data has safaricom received in the last five years as disaggregated by year and how many of the requests were acted on positively?
Henry, I have touched on this question before but to be clear, we do not get requests from government. Where we do get requests, it is usually in criminal investigations and court proceedings where typically the information sought is call data records.


I just have one question for Safcom with respect to Competition.  Are they willing to:
a) Be split into several independent units? As in make the Mobile money business (MPESA) a separate and autonomous unit from their Voice and Data side of business?
b)  Open up MPESA service such that if I vuka (migrate) to competition e.g Airtel, I do not lose the MPESA facility?
Obviously this would be an affront to their 'stronghold' but sometimes it may spice up the market a bit.  This may be necessary considering that their market share lead has not changed much over the last 10years. Which may point to a market failure or maybe they are just clever than everyone else- Walu.
Walu, we currently operate in the way we do because, at this point in time, this is how we believe we can best serve customers. Whether or not we operate in a different model should be entirely up to us and based on our own timelines and aspirations. To cite an innovation as the reason why a company should be split up is inimical to the stated objective of any policy or regulatory framework. Secondly, innovations in the technology space move rapidly and what may be considered a standard or accepted way of doing things can be easily disrupted and replaced by the next innovation. Every day we read about new ways of sending money, many of which are network and indeed geography agnostic. Given that, is this talk about forcibly splitting M-PESA from Safaricom called for? What signal does this send to innovators and investors? What is the legality of such a call? Should this be the main focus of regulators/policy makers? Does this help the customer in any way?

We cannot develop by cutting our companies into small business units. Our goal as a country should be to grow the SME to big corporations that can compete regionally and globally. Safaricom remains a small player compared to other operators who have continental outlook- MTN, Etisalat. In terms of M-PESA, we think there is enough for everyone. At the present 90 per cent of all payment in Kenya are still done in cash. This is what we need to focus on and we believe, as the Kenya Bankers Association has shown, it can be done through innovation.


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