6 Ways In Which Safaricom Could Be Disrupted
It seems to me that Safaricom has what appears to be an unassailable lead as Kenya’s utterly and completely dominant mobile network. Its a behemoth of staggering proportions that seems to devour everything in its path. Everything, and I mean EVERYTHING that Safaricom touches seems almost always to turn to gold. Yes, there have been some failures here and there but more often than not Safaricom gets it right. They. Are. WINNING!
However, it is also often said that every empire crumbles – eventually? In terms of the business of technology, we have seen this happen to the likes of Nokia and Microsoft. Its happening right now in Kenya with Multichoice and their DSTV offering which is hemorrhaging clients like a flood. Safaricom is by no means immune to the eventuality of being disrupted. In my view, these some of the ways in which this could happen:
Failure To Secure Kenya’s Youth Market Segment
Safaricom has cornered the majority of the market for its mobile network offerings, across the board. Its the only mobile network with 4G to-date. They have great national coverage in Kenya. They are hugely profitable. However, this lead has been generally established with customers in the 25+ years old market. This is exactly why Safaricom needed to launch its BLAZE offering a few months ago as it had largely ignored the youth market segment – collectively known as Millenials and Generation Z.
Safaricom’s own market research had established that it had become a victim of its own success as far as the youth in Kenya was concerned which meant many were opting for competing mobile networks – especially Airtel’s UnlimiNet offering. It remains to be seen of Safaricom’s BLAZE will work long term but in the short-term it may have stemmed the tide in terms of losing the youth to Airtel and Orange. The unique BLAZE offerings are laser focussed on locking in the youth based on what they want in a mobile network.
In terms of next steps, Safaricom will need to be obsessed on the youth market segment so as to continually renew its brand affinity for this super important consumer. If you win them young you will have forever so to speak. Consider the fact that most of us are still using the same mobile network we connected to 10+ years ago and have no intention of switching even as we suffer poor service delivery so very often. This customer lock-in approach means that its the gift that keeps giving for any mobile network.
A Radically Better M-Pesa Alternative
Whenever you use M-Pesa on your smartphone you always get the feeling that it was clearly designed for a pre-smartphone era. It clunky. Its not user friendly. Yes, it does the job but the whole user experience sucks to be honest. Therefore, in a world where user experience or ‘UX’ is increasingly a major service differentiator that acquires, engages and ultimately retains customers, if one could build a better mouse trap in the form of an M-Pesa alternative this could be hugely disruptive.
The fact that Safaricom has not (yet?) developed a dedicated M-Pesa mobile app of their own that is in-line with the modern smartphone mobile app experience that customers have come to expect and love in the likes of Uber and Facebook is super significant. Indeed, Safaricom has launched a ‘swiss army knife’ sort of mobile app that seems to bundle possibly too many use cases and doesn’t really re-invent the M-Pesa UX is actually quite disappointing given Safaricom’s gargantuan resources. This is something that could disrupt them – especially with Millennials and Generation Z who expect everything to work in a mobile app.
The last aspect about M-Pesa that is somewhat surprising is that over a year since an API was launched by Safaricom, it really does not seem to have been adopted widely by many businesses from what I can tell. There are actually few use cases beyond the banks and other major businesses that are using. The dream as I recall for many a mobile app developer is that the M-Pesa API would have been a major game changer for them in terms of innovative mobile apps monetized via M-Pesa-based transactions. This just has not yet panned out. You just have to look at Equity Bank’s recently launched Eazzy Banking offerings on Equitel to see how this is already happening and M-Pesa could already be in trouble on this basis.
Game Changing Bundles
The model of bundling data with voice and SMS is one that Airtel’s UnlimiNet offering pioneered in Kenya and this dented Safaricom given how aggressively they responded last year. I know for a fact that many consumers in Kenya are using Airtel’s UnlimiNet offering simply because they get ridiculously great value for money in the form of voice, SMS and data. This means that these customers use their Safaricom line for receiving calls only and their Airtel line for making calls, getting online and sending texts – usually in dual SIM mobile devices. In addition, Facebook is zero-rated for data on Airtel in Kenya meaning it just makes sense even if 4G is still not available on their network.
To be fair, Safaricom has just launched very cost-effective 4G data bundles as evidenced by their current marketing campaign. However, imagine bundles that go above and beyond what Airtel’s UnlimiNet bundles offer? Imagine bundles that offer even more value for less money? Imagine a bundle for just streaming music or watching EPL football content with zero-rated data. Imagine a bundle that could be unlimited for WhatsApp all day and all the time. Imagine bundles with unlimited local phone calls? My sense is that there is still loads of room for innovation in how bundles are packaged and how they work. I think this aspect in particular is where Safaricom could get disrupted – especially with Millenial and Generation Z subscribers.
Over The Top (OTT) Self Service
Every time I have had to make a call to Safaricom customer service to sort out an M-Pesa issue or something like when they send you a message saying they are going to cut you off unless you go to one of their branches to confirm you are still their customer in person it ticks me off. Its just a horrible customer experience. My sense is that customers would much rather a self service solution delivered via a mobile app or USSD that allows them to do what they normally have to do by engaging a human being!
As technology takes over our lives, we are increasingly becoming ‘ data exclusives’ meaning that we do not want to talk to customer service personnel when we can self service. Safaricom doesn’t really give you this option as things stand on a mobile device in a user friendly manner. Yes, they have added some features via USSD but its still just the tip of the iceberg in terms of what is possible. Consumers want an elegant Uber-like on-demand and WhatsApp-style experience when it comes to customer service and managing their subscriptions so this is clearly a potentially disruptive possibility for Safaricom.
Unlimited Use WIFI Networks
It seems to me that data has become the holy grail for mobile networks, globally. Therefore, as consumers spend more and more of their time on mobile devices using data-driven mobile apps like WhatsApp and Uber on a daily basis, there is a strong business case for mobile networks to deploy strategically located WIFI networks that subscribers can access. The beauty about this approach is that it lessens the strain on overloaded 3G and 4G mobile networks and offloads bandwidth to WIFI cost-effectively. Locations for the same could be places with a high density of Millennials and Generation Z consumers like universities and high schools, as well as the CBDs of major towns and cities in Kenya
Since we essentially live in the mobile data era, having more options than 3G and 4G for subscribers on a mobile network like Safaricom is a pretty good idea. Imagine going to dedicated locations like restaurants and co-working spaces knowing that you have unlimited access to their WIFI service as part of your mobile subscription and/or bundles. This could even be areas where the mobile network itself has bad coverage but you can still use their WIFI network in that location. I am thinking even locations like airports in Nairobi and Mombasa where this is still a serious issue. This is disruption waiting to happen that will keep customers locked-in.
Free Entry-Level Smartphones
We are living in a moment where its possible to purchase entry-level smartphones in Kenya for as little as Kes. 3,000.00 (US$ 30.00). One of the ways that I think Safaricom could be disrupted is a mobile network that decides to give consumers free network-locked and entry-level smartphones provided the users commit to being customers for a certain period of time plus paying for a certain amount of bundle usage every month or the phone becomes inoperable. This is the same model that the likes of M-Kopa are using with their solar powered devices that use M-Pesa payments every month to keep them working.
Basically, if a mobile network could make it free for subscribers to secure a smartphone, especially those who are currently unable to buy one using their own resources, this could be a huge game changer in terms of acquiring and retaining an entirely new market segment. This is a possibility that Safaricom and its competitors in Kenya need to consider as we are getting to the point where almost all Kenyans have access to a mobile device so the next step is to make the on-boarding process almost free – and especially for the Millennials and Generation Z.