Safaricom offers Sh20 a day credit for smartphones purchase

A Safaricom shop in Nairobi. FILE PHOTO | NMG  

By BRIAN NGUGI
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Summary

• Safaricom will offer smartphones on credit to its subscribers who will make daily payments of as little as Sh20 a day for up to a year as the firm seeks to ramp up data revenues.
• The telco is partnering with Google to offer one million affordable smartphones, chief executive Peter Ndegwa said Wednesday.
• The offer is available for all phones and the daily repayments will increase if subscribers go for high value smartphones as Safaricom seeks to eventually convert about 4 million 2G and 3G-enabled phones to 4G.

Safaricom will offer smartphones on credit to its subscribers who will make daily payments of as little as Sh20 a day for up to a year as the firm seeks to ramp up data revenues.

The telco is partnering with Google to offer one million affordable smartphones, chief executive Peter Ndegwa said Wednesday.

The offer is available for all phones and the daily repayments will increase if subscribers go for high value smartphones as Safaricom seeks to eventually convert about 4 million 2G and 3G-enabled phones to 4G.

Safaricom is aiming to rev up its data business to offset sluggish growth in mobile calls, where it has seen a small revenue growth due to saturation, forcing the firm to turn to M-Pesa and internet to power future growth.

“A lot of our consumers are still on 2G and to some extent 3G devices. That’s the reason we are saying even if you have 4G coverage which we will have by the end of this year across the country you need to start improving access to devices,” Mr Ndegwa who took the reins on April 1, told the Business Daily in an interview.

“It is an innovative way of allowing customers to get a device that they would otherwise not be able to afford. If you have an app, you can’t use it on a 2G phone.”

Google, which is providing the software for the phone, will switch off the phone and make it unusable in case a customer defaults on payment.

Data is one of Safaricom’s fastest growing revenue lines and it hopes that increased smart phone usage will boost it further.

Revenue from mobile data, where Safaricom has been aggressively fighting for market share by offering internet bundles without expiry, rose 12.1 percent to Sh40.7 billion, after recording 21 percent growth in the second half.

“We want to democratise the use of data, whether it’s for education or other uses,” said Mr Ndegwa.

Safaricom will this year launch Kenya’s first fifth-generation (5G) mobile internet services targeting major urban centres, making it the inaugural operator to offer commercial and superfast services in the region.

The firm had completed testing and trials for the upgraded network as the company seeks to capitalise on burgeoning mobile Internet use in the country.

The 5G service is a central part of its attempts to further expand its data business to counter slower growth in voice calls revenue.