Safaricom Limited, Kenya’s biggest telecommunications company will tomorrow announce its financial results for the year ended 31st March 2012.
Safaricom is undoubtedly the biggest telco in Kenya and the wider East African region with KES 94.83 billion in turnover in 2011 and nearly half of the Kenyan population as customers as of March 2011, 17.18 million of us. They call themselves an “integrated communications company,” the biggest in Africa with their many-million subscribers. Through their intricate network that criss-crosses the country and their investments in satellite, they provide voice (calls), data (internet) and video. And M-PESA, the behemoth of an innovation that has come to render traditional stiff-upper-lip banking irrelevant in this era is simply one to behold. The service was truly revolutionary in every way, turning your Nokia, Samsung, iPhone, Blackberry or Kabambe into an ATM, enabling you access the very same services rendered by a teller at a bank, albeit without a long line to wait in and at your personal convenience. In fact, didn’t they bring Kabambe phones to Kenyans capitalising on Chinese technology (Huawei) to provide us with low-cost phones with 3G internet? They did. They brought us 3G internet in the first place.
But with success comes expectations.
And with expectations comes frustrations, when those expectations are not met by that big successful company. The “problem” with 17 million customers is that each of them has their own idea of how ideal service should be. And we all know the customer is always right. Social media has given a good number of Safaricom’s customers a direct avenue to vent their frustrations concerning network outages, text messages failing to deliver and poor internet speeds. And even more, social media has given these tech-savvy Kenyans an audience. So that one tweet in frustration concerning normal network issues (it is man-made after all) could spread far and wide and mutate from a harmless tweet into something more. Safaricom has not had a good time with this generation of Kenyans. They have, too often for comfort, complained on poor service delivery. Many have gone as far as to threaten to leave the network. It does not help Safaricom’s case with the firm being perceived to be in favour of maintenance of the current mobile termination rates while other players are seen to be angling for even lower rates.
In their half-year financial results released in November 2011, Safaricom cited rising operational costs as one of the factors that had affected business in the course of the year. The Communications Commission of Kenya had then reported about 64.2% market penetration and growth in customer numbers is increasing at a decreasing rate. With the high inflation last year, the numerous cable cuts and the friction the company is having with customers agitating for better services, Safaricom is unlikely to announce KES 13.13 billion in net profits as it did in 2011 or KES 15.15 billion as it did in 2010. Double-digit net profit figures are however expected with growth in data and M-PESA underpinning their financial performance.