Safaricom targets data resellers with Sambaza cap

Corporate News

Safaricom has cut data bundle sharing per SIM card to 20 a month. PHOTO | FILE 

By MUGAMBI MUTEGI, pmutegi@ke.nationmedia.com

In Summary

• Safaricom has cut the number of times one SIM card can share data bundles to 20 per month down from 50, in an attempt to seal one of the loopholes that has made resale of Internet credit flourish.
• The traders sell bundles at lower prices than Safaricom’s official rates by buying in bulk and then breaking them down into small bits for users.
• Safaricom, which has in the past said the business is not illegal and issued a disclaimer that they have not licensed any third party resellers, is now trying to clamp down on the business.

Safaricom has moved to curb the resale of its Internet bundles by halving the number of times third-party traders can distribute data on one SIM card every month.

The telco on Monday cut the number of times one SIM card can share data bundles to 20 per month down from 50, in an attempt to seal one of the loopholes that has made resale of Internet credit flourish.

The traders, who mainly operate online portals complete with Paybill numbers, sell bundles at lower prices than Safaricom’s official rates by buying in bulk and then breaking them down into small bits for users.

“We introduced the new guideline in response to changing usage trends by our customer base,” said Safaricom corporate affairs director Nzioka Waita in a response to the Business Daily query.

Safaricom introduced the ‘Sambaza Internet’ service in February 2013, giving customers a means to send data bundles of between five megabytes and two gigabytes to other users and devices. Sambaza is Swahili for forward or share out.

The Internet sharing platform was launched following the success of Sambaza Credo, which let users share their mobile airtime.

While the airtime sharing system has remained an avenue for Safaricom customers to share out their airtime with friends and relatives, tech-savvy Kenyans have found a way of making a killing from the Internet data bundles version of the service.

READ: Online firms make a killing reselling Safaricom data unit

The traders, who openly market their services online, buy data bundles in bulk from Safaricom, and resell to customers at rates lower than those supplied directly by the telco.

Safaricom, which has in the past said the business is not illegal and issued a disclaimer that they have not licensed any third party resellers, is now trying to clamp down on the business.

“I realised that some SIM cards could not send out data bundles since they had supposedly clocked their monthly limit of 20 times and not the usual 50,” said Albert Otara of Soko Huru Communications, one of the firms in this business.

“This move by Safaricom caught us unawares and it created a severe backlog on our end.”

Safaricom sells 500MB for Sh500 but Soko Huru can supply 820MB of data bundles for the same amount of money, a disparity that it has used to attract online buyers. He sells 1.5GB of data for Sh860 while Safaricom provides the same for Sh1,000.

“We have been forced to register some extra lines this week in order to continue doing business since our customers are still placing orders as usual,” Mr Otara told the Business Daily on Thursday.

Safaricom’s Sustainability Report 2014 states that customers share about 40 terabytes (TB) of data per month against a launch target of 4TB through the service.