Kamal Bhattacharya, Chief Innovation Officer, SAFARICOM – We have a smartphone base of about 10 million

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Ashok-khana-200x-200Kamal Bhattacharya
Chief Innovation Officer
Safaricom

Safaricom is in the TV, Telco as well as e-commerce business, how are all these entities working in synergy?

Our presence in different aspects of our customers’ lives goes back to two key points. One, our purpose of Transforming Lives by catering to the needs of our customers. And secondly, our strategy to be a platform. We long came to the realization that there was a need to go beyond merely selling voice, SMS or data, to providing services around these basic products.
Looking at our strategy as a platform, we are also cognizant of the fact that value is best delivered when we come together with other experts. For instance, we provide a link to our customers’ homes, then partner with ShowMax and Kwesé TV for Video on Demand services.
In e-commerce, we have the know-how to build a platform, and we understand our customers best. We therefore create this platform that allows any merchant in the country to list their products and sell to anyone in the country. We then partner with two logistics services providers – Sendy and Wells Fargo – to deliver any product to a customer, wherever they may be. This way, you can see we are creating value in two ways.
For our customer, we are expanding the range of products and services that they can access and creating efficiency by saving them time they would have spent shopping. For merchants, we are virtually creating a national market place while saving them the associated costs with creating an online selling, payment and delivery platform. We enable them address potentially more customers than they would have with rolling out physical premises.

How would you rate Africa’s state of readiness for e-commerce and online transactions?

If you look at our customer base of 29 million, you will see that we have a smartphone base of about 10 million. This means that 1 in 3 mobile phone users are on a smart, broadband connected device. At the same time, our 3G and 4G broadband networks reach more than 85 percent of Kenya’s population.

You can also see the signs from other players, including Global Players. In February, we announced a partnership with Google which empowers M-PESA customers to pay for apps and games on Google Play Store. And in April, we partnered with PayPal to enable Kenyans send and receive payments from PayPal’s more than 200 million customers globally.
If you take Mobile Money Transactions, the October 2017 to December 2017 quarterly industry report values mobile commerce transactions at $11 billion compared to $17.6 billion for person to person transfers. This does show that people are increasingly engaging in mobile commerce and transactions.
In turn, this is an indication of market readiness for mobile e-commerce solutions.

What are the innovative projects that Safaricom is currently working on?

Beyond our Masoko e-commerce solution and our fiber-to-the-home offering, we are also working on digitizing payments and digitizing agriculture. More than nine out of ten payments in Kenya are still done in cash. The challenge in cashless payment platforms like M-PESA is in making them as frictionless as Cash.

We are doing this in two ways – by reducing the cost and increasing the speed and convenience. In May 2017, we eliminated merchant transaction fees for payments of $2 and below. This is because we know that about half of all payments in Kenya are of $2 and below. In speed and convenience, we have rolled out several technologies that reduce the number of steps required to make a payment. We have made it as simple as giving a merchant your mobile number or scanning a QR code. You then complete the payment by keying in your PIN. Before, it took eight steps to make the same payment.

In Agriculture, we have rolled out two solutions whose goals are to transform the lives of farmers the same way M-PESA transformed payments. Connected Farmer is an agribusiness solution that enables processors to automate their collection of farm produce, and their interactions with farmers. It increases the visibility and transparency of the collection process for a farmer, with both parties immediately having awareness of quantity and quality collected. The solution has also reduced the time farmers take to get paid from more than three months to every month.

How is Safaricom taking advantage of the arrival of OTT players?

OTT services are a natural evolution of a customer’s needs. Once basic voice, SMS and data needs have been met, customers explore how else they can obtain value from these solutions. At Safaricom, we actively explore solutions that we can provide to meet these needs. Most of these solutions are provided as a partnership, since this creates the best value for a customer.

Some of our OTT services that we have partnered to provide to our customers include M-KOPA solar, M-Shwari and KCB M-PESA for borrowing and saving, and DigiFarm in Agriculture, as described above. We also provide a platform that enables other OTT players to build their services on top of and offer these to our customers.

M-PESA is one such platform. In August 2017, we rolled out a modern Application Programming Interface on M-PESA that allows any developer or business to interconnect their solutions with M-PESA. We already have seen Barclays Bank creating a microfinance solution off these new APIs. We also partner with other OTT players such as Kwese and ShowMax in the Video on Demand space. For Safaricom, we see OTT players as important partners who help us bridge the needs of our customers with creating value for them.