Lessons from Kenya’s Safaricom

Tuesday September 14 2021
safaricom pic
By Kasera Nick Oyoo

Based in Nairobi, Kenya, East Africa’s leading mobile telecommunications company, Safaricom, has more than 5,600 employees, and is the most profitable company in the region, year after year.

By way of comparison, the two biggest such companies in next-door Tanzania next-door – Vodacom Tanzania and MIC Tanzania (Tigo) – don’t come even close.


Lean family cow

If we are intent on making the most out of the lean family cow, Vodacom Tanzania board chair Margaret Ikongo and her MIC Tanzania counterpart, Ami Mpungwe, should truly be concerned that, as mobile network operators (MNOs), they cannot hold a candle to the Kenyan MNO.

In reality, the so-called Tozo ya Uzalendo (Patriotic Levy) on mobile money transactions is already problematic for the very people whom it was intended to benefit through readily accessible social products and services.

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While no one who is sane would be against the provision of improved socioeconomic products and services, this nonetheless is NOT the subject of my column today.

Today, I am left to wonder why the United Republic government of Tanzania is hell-bent for leather, proverbially-speaking, on milking the only potentially productive family cow, the telecommunications sector of the economy.


Indisputable fact

It is an indisputable fact that, generally, sentiment defines how we imagine our success to be – and, therefore, we are inclined to deny the numbers showing that our telcos are by far playing second fiddle to the ‘Big Kahuna’ of the regional Telcos market, Safaricom.

Safaricom contributed more than Ksh834 billion to government coffers in 2018. The Business Daily reported that Safaricom as a business contributes six percent of Kenya’s real gross domestic product (GDP), put at some $95.410 billion in 2019, when the coronavirus Covid-19 pandemic had not taken hold globally.

Let that figure sink in…

So, Ikongo and Mpungwe – and, by extension: the Communications and Finance ministers, as well as the government at large – must ask themselves why the Tanzanian MNOs in their totality do not contribute as much to jobs creation and the national Treasury.

But, more often than not, such questions are dismissed out of hand and otherwise pooh-poohed by the authorities – ostensibly for patriotic reasons.

Yet, it is important that we ask the unasked questions. For example: are we to believe that the exit of the Chief Executives from two leading MNOs in Tanzania a normal change of the guard – so to speak? It is like a scene in a movie; and, if you believe this, you will believe anything!

But, how I wish it were the reality on the ground.

But then again: how badly would it hurt us to conduct a deep study of our MNOs with the objective of finding out why we in Tanzania are unable to make trillions of shillings annually, while Kenya next-door is doing as much, pray?

It is simple and simplistic to just say that Safaricom is a dominant player in Kenya. Simple – considering that, given its mouth-watering performance in Kenya, the company no doubt dominates the telecoms sector. But performance statistics alone do not explain the dominance...

Is Safaricom favoured by the regulator? Does it release false figures? Is it particularly creative in how it works?


Only one Kenyan CEO

In its 20 years of operations in that country, Safaricom has had only one Kenyan CEO who is barely two years in office.

Are we able to build world class operations in this sector when our dominant mind-set is how to tax our only family cash cow without bothering to feed it as appropriate?

Ask yourself whether or not we have answers to these questions – or we allow our minds to control how we think even where we ought to make hard business decisions.

When are we in Tanzania going to see an independent government report on the failings of our mobile telephony system?