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The Conditionality of Safaricom

How do we get ourselves to profitability? This seems to be the desperate sentiment of most networks in the country that have to grapple with Safaricom’s alleged dominance.

A few have bitten the dust (most recently, YU) in the process, while the best of survivors have had to resort to the chameleon tactic of changing their colours every few years.

New owners breathe new life into the dejected ventures of their predecessors, and initially it’s quite fresh and exciting. So much so that it entices customers in the green camp to their vivacious camp fires.

Of course such excursions, for that’s all they are for the majority, only last until the party is over. For the moment the glaring shortcomings start smouldering on these dying fires, it’s back to where “the party never stops”.

Some few however do hang on albeit with a loyalty split disproportionately in favour of their “first love” thanks to the bigamy afforded by dual-sim devices. It’s my conjecture that this is how Airtel and Orange Kenya (now Telkom) have managed to survive this long.

The unshakable loyalty Safaricom displays here however has little do with their superior network coverage. The potent charm it seduces and hold Kenyans with is undeniably M-PESA. Take away that from Safaricom, and much of its dominance starts looking rather shaky.

With the dawn of interoperability, it seems therefore the ground is the most fertile it has been for the other networks to stake a claim for Safaricom’s loyal base. Nevertheless, this alone may not be adequate at dismantling the monopoly they’ve amassed over the past 18 years.

Clearly they need help, and that help has to come from two ends: themselves and from Safaricom’s own diligent self-sabotaging efforts. That seems to be the only sure way at this point.

Telkom and Airtel would at the moment thus best focus their efforts on self-improvement more than anything. This way their seduction will be more effective for long-term courtships instead of the dalliances they seem to excel in at the moment.

With that said, Telkom’s brand of coquetry has to be noted here, if not applauded. Their dandy display of yellow and turquoise coupled with the subtle mockery of their green-eyed rivals is clearly winning them some hearts.

On the other hand, Safaricom has to keep shooting itself in the foot as it has been dutifully doing for the past few years. No added effort is needed to impel them in this direction. Such heedless confidence is what success generously inflates the ego with rather tragically.

Over the past years, they’ve seemingly been caught up making spectacles of themselves in efforts to court different segments of the market.

They’ve since made their foray into TV, FTHH (Home Fibre) and Online Retail. They have also thoughtfully empowered the youth to make bosses of themselves yet slaves to their bossy services.

These and more are good distractions for the company, but somehow it has come at the cost of them lowering their guard down where it counts most: voice, SMS and mobile internet.

In all these three segments Safaricom is still the most expensive. Voice is to say the least exorbitant at Ksh.4 per minute, while its struggling competitors are making do with half of that.

By the look of things, it’s quite clear that Safaricom is very reluctant with the idea of lowering their call rates. Instead, they find it more preferable (sustainable?) to dangle offers on end.

Tunukiwa that started as a one-trick pony promotion has now been turned into a workhorse that hopes to till this land back to its former luxuriant self. I say former self because Safaricom has been steadily losing its market share and nowhere is this more evident than in its voice product, its biggest revenue source.

It’s this sentiment that informs the title of this post. You see Airtel Kenya touts itself as “the smartphone network” and Telkom, well let’s say they prefer getting things moving (top of the list being moving Safaricom customers to their network). So where does this leave Safaricom?

Well, Safaricom is the “conditional network”. Much of what they term “offers” are actually “throwaways” in light of the conditions they come bundled with. Tunukiwa Offers serve as the best example of this as the cheap throwaway plans in its repertoire can be afforded by Safaricom thanks to their “micro-validity” periods.

Tunukiwa in essence is a kadogo market for Safaricom’s plans. It’s so to speak, where the Safaricom “working class” multitude shops around every day for what they need to use at a time. They imagine themselves making huge saves, true, but only to those inextricably fettered to Safaricom’s wrecking ball of profit.

Those that can afford not to spend time doing such micro-transactions daily, for time is money, can flex their pockets or settle for more reasonable worry free monthly shopping sprees.

The other unlikely alternative is to just switch to the competition where call rates are much reasonably priced without the gimmicky marketing baits. For instance, how absurd is it this offer of exchanging airtime for more airtime?

For obvious reasons, I usually get the “Get 20 Bob airtime for only Ksh10 VALID 24 HOURS?”. With reservations I’m compelled to address this meaningfully with only three letters: SMH.

tunukiwa offer
Talk more for less at lesser hours

At the same time Telkom and Airtel can’t help themselves but remind me every day that I’m not broke; or more accurately, don’t have to be frugal or apprehensive when using their networks.

airtel telkom rates
They can’t help it albeit desperately

Another puzzling conditionality is what has become of Bonga Points. Long gone are the days one could redeem a device with points alone. The points themselves have been turned into a commodity if not a currency.

In that sense they’ve lost much of that altruistic identity that constitutes a loyalty program. For is it not a conditional loyalty? Of rewards that have to be unfastened with scissors bought from the rewarder. A “be loyal to me and I’ll be loyal to you if you can compensate part of my bigger loyalty”.

Perhaps they, and to an extent Airtel’s Zawadi Points, could learn a thing or two from Telkom’s Ziada Points on how not to commoditize a loyalty program. Then again, one shouldn’t be too naive to think loyalty programs are charity work. It’s a subtle business strategy that serves a critical purpose: brand loyalty.

Side note: Safaricom is currently running a TV ad for their budget Neon Kicka Android device. Apparently buyers of the phone will get 500MB data BUT ONLY after they top up with KSh.50 or more. That gave me a chuckle. Forget conditionality. We might as well surmise that Safaricom with their mega profits are just stingy with their “cheap stuff”.

One is bound to get tired of such conditions after a while. Two years ago our household only had one Safaricom loyalist. That number is down to zero with the remnants of Safaricom relegated to the lighter duties of M-PESA. Once in a while also, a friend will call with a new number, that is, new without a hint of green in its SIM.

A trend is emerging here and the stats point to this direction: more and more people are realizing they have better options elsewhere that can be adopted without foregoing M-PESA use.

Ironically, once upon a time Safaricom used to be the “better option”. That was actually part of their tag line. Nowadays they have something far more succinct: #Twaweza. A couple more missteps and a letter and they could slowly but surely turn that into: #Twawezwa.

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Kelvin Kathia

Kelvin Kathia is the editor of Kenyan Fix, an informational blog that helps Kenyans with solutions to everyday questions on mobile networks, government services and banking.