# Safaricom

Safaricom PLC is a listed Kenyan mobile network operator headquartered at Safaricom House in Nairobi, Kenya. It is the largest telecommunications provider in Kenya, and one of the most profitable companies in the East and Central Africa region. The company offers mobile telephony, mobile money transfer, consumer electronics, ecommerce, cloud computing, data, music streaming, and fibre optic services. It is most renowned as the home of M-PESA, a mobile banking SMS-based service.
Safaricom controls approximately 65.7% percent of the Kenyan market as of 2024 with a subscriber base estimated at approximately 47 million.
In terms of voice market and SMS market share Safaricom controls 69.2% and 92.2% respectively.
Safaricom was formed in 1997 as a fully owned subsidiary of Telkom Kenya. In May 2000, Vodafone Group PLC of the United Kingdom acquired a 40% stake and management responsibility for the company. In 2008, the government offered 25% of its shares to the public through the Nairobi Securities Exchange.
Safaricom was ranked as Africa's Best Employer, 67th in the World by the Forbes Global 200 list of the World's Best Employers. In March 2018, Safaricom was ranked as the #1 company to work for in the annual BrighterMonday Best 100 Companies to Work for in Kenya according to career professionals and job seekers.
In 2019 Safaricom partnered with Shared Value Africa Initiative to host the Africa Shared Value Summit.
As of 2020, Safaricom employed over 4,500 people permanently and over 1,900 people on contract. 75 percent of the company's employees were based in Nairobi, the Headquarters, with the remainder based in other big cities like Mombasa, Kisumu, Nakuru and Eldoret, in which it operates retail outlets. It has nationwide dealerships to ensure customers across the country have access to its products and services.
In November 2012, Safaricom partnered NCBA Bank and came up with a "revolutionary" banking product, M-Shwari, which allows M-Pesa customers to save and borrow money through mobile phone while earning interest on money saved tapping into an underdeveloped financial services market.
Michael Joseph served as the founding CEO between July 2000 and November 2010. He transformed the telecom from a subscriber base of less than 20,000 to over 16.71 million during his previous tenure. In his last full year as CEO, Safaricom posted a 37 percent rise in pretax profit.
Bob Collymore took over at Safaricom in November 2010, replacing Michael Joseph who went on to serve in the telco giant's board as the Chairman. Collymore oversaw the introduction into the market of various mobile money products that have given the company leverage among its competitors. Collymore was also at the forefront in leading the charge against regulatory efforts to clip the company's wings due to its size and dominance. After a two-year battle with cancer, Bob, the longest-serving executive died on July 1, 2019, leaving behind a company with doubled user base and profits increased by 380%. Michael was appointed as interim chief.
Peter Ndegwa was appointed as CEO effective April 1, 2020.
In January 2023, Safaricom made Adil Khawaja its of chairman of the board of directors.
In May 2024, Safaricom was affected by communication disruptions following the severing of submarine cables across East Africa.

## History

2G service on 900 MHz and 1800 MHz. 3G DC-HSPA+ service on 900 MHz & 2100 MHz. Safaricom later launched LTE-A (4G service with carrier aggregation) service in Nairobi and Mombasa on band 20 (800 MHz) and band 3 (1800 MHz) in December 2014 and has expanded to other cities. Safaricom's competitors, Airtel Kenya and Telkom Kenya have expressed dissatisfaction with the way the regulatory body Communications Authority of Kenya, awarded Safaricom its LTE (long Term Evolution) license to operate at 800 MHz.
Safaricom was the first company in Kenya to possess 3G Internet technology with the recent success of 4G / LTE connectivity currently in all major Kenyan cities. In March 2021, Safaricom became the second network operator in Africa after Vodacom to launch a live 5G network, initially available in Nairobi, Kisumu, Kakamega and Kisii.

### Flashback service (Please Call Me)

Most of Safaricom's network congestion emerges from a practice called 'flashing'. Flashing is the practice of calling another mobile user, but disconnecting before the connected call is answered. It provides a method for mobile users to alert someone that they wish to be called, but either can't, or won't, pay for the call. The method is cost-free for the users; but costly in network bandwidth. That is why Safaricom introduced a flashback service that gave every subscriber five free SMS messages with a single predefined message stating "Please call me. Thank you". Although the messages can be annoying when sent just for fun they can prove useful when one is in trouble and has no airtime. It also gives parents more of a reason to get mobile phones for their children without the real need for getting them airtime.

### Kipokezi service

Safaricom launched the Kipokezi service in May 2000 that enabled its subscribers to send and receive email and online chat through standard mobile phones. The service did not require users to have an Internet connection as it used ForgetMeNot Africa's Handset Initiation technology. Prior to the service fewer than one in ten Kenyans had accessed the Internet but the Kipokezi launch allowed more than a third of the population to exchange email and online chat messages.

### Lipa Mdogo Mdogo

In Partnership with Google, Safaricom introduced Lipa Mdogo Mdogo, a product targeting individuals with 2G phones by upgrading them to 4 G-enabled devices while paying daily installments of Ksh.20 over a period of one year.
Ndegwa, who is the CEO of the company pointed out that they were targeting 1 million customers with plans of rolling the service to other countries depending on its initial success.

## M-PESA
### History

An M-PESA-enabled mobile phone can also function as an electronic wallet and can hold up to KSh.500,000/= (approx. US$3500). Safaricom has announced that it intends to roll out M-PESA to other countries.
M-PESA (M for mobile, pesa is Swahili for money) is a mobile phone-based money transfer, financing and micro financing service, launched in 2007 by Vodafone for Safaricom and Vodacom. M-PESA was originally designed as a system to allow microfinance-loan repayments to be made by phone, reducing the costs associated with handling cash. After the pilot testing it was broadened to become a general money-transfer scheme. Since then safaricom M-PESA brand has reached 12 countries in Africa and three countries outside the continent.

### How it works

Once a user registers for M-PESA, they pay money into the system by handing cash at an M-Pesa agent, who then credits the money to the user's M-Pesa account. The user then gets an SMS notifying them of the transaction.
A user withdraws money by visiting an agent, who checks that the user has sufficient funds before debiting the user's account and handing over the cash. An M-Pesa user can also transfer money to others using a menu on their phone. Cash can thus be sent one place to another instantly, safely and easily. This is in contrast to the preferred system before where money was sent by a porter, usually a friend, relative or bus crew, to the intended recipient.
M-PESA was first launched by the Kenyan mobile network operator Safaricom, where Vodafone was technically a minority shareholder (40%), in March 2007. M-PESA quickly captured a significant market share for cash transfers and grew to 17 million subscribers by December 2011 in Kenya alone.
The growth of the service forced formal banking institutions to take note of the new venture. In December 2008, a group of banks reportedly lobbied the Kenyan finance minister to audit M-PESA, in an effort to at least slow the growth of the service. This ploy failed, as the audit found that the service was robust. At this time, The Banking Act did not provide the basis to regulate products offered by non-banks, of which M-PESA was one such very successful product. As at November 2014, M-PESA transactions for the 11 months of 2014 were valued at KSh.2.1 trillion/=, a 28% increase from 2013, and almost half the value of the country's GDP.
On November 19, 2014, Safaricom launched a companion android app Safaricom M-Ledger for its M-PESA users. The application, currently available only on Android, gives M-PESA users a historical view of all their transactions.

### M-Pesa's usage and success in Kenya

M-Pesa has been particularly successful in Kenya, compared to mobile money platforms in other countries. Contributing factors here include the exceptionally high cost of sending money by other methods; the dominant market position of Safaricom; the regulator's initial decision to allow the scheme to proceed on an experimental basis, without formal approval; a clear and effective marketing campaign (“Send money home”); an efficient system to move cash around behind the scenes; and, the post-election violence in the country in early 2008.
During the post-election violence, M-Pesa was used to transfer money to people trapped in Nairobi's slums at the time. Some Kenyans regarded M-Pesa as a safer place to store their money than the banks, which were entangled in ethnic disputes. Having established a base of initial users, M-Pesa then benefited from network effects: the more people who used it, the more it made sense for others to sign up for it.
M-Pesa has since been extended to offer loans and savings products, and can also be used to disburse salaries or pay bills, which saves users further time and money as compared to doing so from banks.
M-Pesa has a wide range of financial services including Person to Person, ATM withdrawal, Payments, Bulk Payments and Bank to M-Pesa.
As of January 2016, M-Pesa is used by 21.8 million Kenyans, with over 1.5 million of M-Pesa users using the bill payment feature. At the time M-Pesa had a network of over 90,000 agent outlets.
Average value of monthly person to person transfers on M-Pesa was KSh.106 billion/= while Person to Business transfers were at KSh.23.5 billion/= and Business to Person at KSh 27.8 billion/= per month.
M-Pesa is in partnership with a number of banks. M-Shwari and KCB M-Pesa are two such services, which provide access to savings and loans to users. M-Shwari was launched in November 2012 in partnership with Commercial Bank Of Africa.

### Safaricom and Visa partnership

Safaricom and VISA in June 2022 launched an M-PESA Visa virtual card that allows Kenyan users to shop for products and pay for services worldwide, facilitating safe cashless payments at merchant locations in over 200 countries via Visa's global network.
| Product | Description | Description | Time line |
| M-Shwari | This is a banking product exclusively for M-PESA customers provided by Commercial bank of Africa (CBA) in partnership with Safaricom. M-Shwari provides financial access to millions of Kenyans who previously had no access allowing them access micro savings and micro credit straight from their phones. | This is a banking product exclusively for M-PESA customers provided by Commercial bank of Africa (CBA) in partnership with Safaricom. M-Shwari provides financial access to millions of Kenyans who previously had no access allowing them access micro savings and micro credit straight from their phones. | Nov 2012 |
| M-Shwari Lock Savings | This is a savings account that allows M-Shwari customers to save fund for a defined purpose, for a specified amount and within a specified period | This is a savings account that allows M-Shwari customers to save fund for a defined purpose, for a specified amount and within a specified period | June 2014 |
| M-PESA Growth | 2014 2015 Deposits 104,955,132,618 125,298,015,514 Transfers 92,116,902,245 107,396,348,247 Withdrawals 90,264,165,528 107,065,238,244 B2C 14,183,972,826 29,303,669,495 C2B 14,767,038,267 24,536,550,463 Airtime 3,954,745,855 4,868,556,607 M-KESHO Deposits 2,036,686,967 2,364,464,562 Buy Goods 5,647,048,109 13,387,019,244 IMT 565,608,224 1,011,196,047 | 2014 2015 Deposits 104,955,132,618 125,298,015,514 Transfers 92,116,902,245 107,396,348,247 Withdrawals 90,264,165,528 107,065,238,244 B2C 14,183,972,826 29,303,669,495 C2B 14,767,038,267 24,536,550,463 Airtime 3,954,745,855 4,868,556,607 M-KESHO Deposits 2,036,686,967 2,364,464,562 Buy Goods 5,647,048,109 13,387,019,244 IMT 565,608,224 1,011,196,047 | 2014 2015 Deposits 104,955,132,618 125,298,015,514 Transfers 92,116,902,245 107,396,348,247 Withdrawals 90,264,165,528 107,065,238,244 B2C 14,183,972,826 29,303,669,495 C2B 14,767,038,267 24,536,550,463 Airtime 3,954,745,855 4,868,556,607 M-KESHO Deposits 2,036,686,967 2,364,464,562 Buy Goods 5,647,048,109 13,387,019,244 IMT 565,608,224 1,011,196,047 |
| M-PESA Sure pay | Safaricom launches a new service that allows organizations such as World Food Programme to track funds send to beneficiaries via M-PESA | March 2015 | March 2015 |
| M-PESA and Vodacom Tanzania partnership | M-PESA customers now able to send and receive money to and from Tanzania | March 2015 | March 2015 |
| KCB M-PESA | Safaricom and KCB launched a mobile savings and loan product | March 2015 | March 2015 |
| Lipa Stima Service | Okoa Stima allows one to borrow any amount they require based on a predetermined limit given by their historical relationship with Kenya Power & pay their post pay or prepaid KPLC bills by dialing *885# from the mobile. | April 2015 | April 2015 |
| M-PESA G2 platform | Migration of the current M-PESA G1 platform to allow an enhanced G2 platform that will allow for faster transactions, improved stability as well as enable more functionality from the service. | April 2015 | April 2015 |
| E Citizen | Safaricom partners with the Government of Kenya to provide one Paybill number 206206 for use in payment of government services through the governments e-citizen platform | April 2015 | April 2015 |
| Realtime settlement (RTS) | A service that allows partners to receive funds after withdrawal from their merchant tills real-time in their bank account So far 17 banks have been on boarded for the RTS service: Equity Bank Kenya Commercial Bank Co-operative Bank Diamond Trust Bank NIC Bank Standard Chartered Bank Consolidated Bank CFC Stanbic Bank National Bank of Kenya Chase Bank Bank of Africa Gulf African Bank Commercial Bank of Africa First Community Bank Credit Bank Kenya United Bank For Africa Jamii Bora | July 2015 | July 2015 |
| 1st M-PESA developers initiative | Safaricom opened up the API for M-PESA to third-party developers, a move that will encourage innovation and attract more traffic onto the mobile money system. | September 2015 | September 2015 |
| M-Akiba launch | Safaricom in partnership with the government launched a product that allows Kenyans to be able to open Central Bank depository accounts from their phones without visiting a bank or broker, and can then buy government paper for as little as KSh.3,000/= | September 2015 | September 2015 |
| Hakikisha | A service that allows customers to confirm the name of the recipient before sending funds, withdrawing funds and paying bills | October 2015 | October 2015 |
| New KCC cashless solution | Safaricom formed a partnership with Kenya Co-operative Creameries (KCC) to deploy a cashless payments service to enhance business efficiency and address the risks associated with cash handling. Through a mobile application, over 200 sales and distribution agents for New KCC will be able to place and process orders, access live delivery reports, create invoices and make payments. The app will also generate regular reports to ensure accountability and for record keeping. | November 2015 | November 2015 |
| M-Tiba | This is a mobile centric platform approach that seeks to provide better coordination of Health care services between payers, patients and providers | December 2015 | December 2015 |
| M-PESA Statements | A customer is able to access their M-PESA statements by dialing *234# from their handsets and follow prompts to enter the preferred email address to which they would like their M-PESA statements sent. Customers have an option of accessing one-off statements for 3; 6 or 12 months in one go. | January 2016 | January 2016 |
| Lipa Na M-PESA | Safaricom Lipa Na M-PESA merchants hit 36,000 | February 2016 | February 2016 |
| International Money Transfer | This service allows anyone wishing to send money to Kenya to visit a Safaricom IMT partner and send money to an M-PESA mobile phone in Kenya. The transaction is similar to a traditional cash-to-cash money transfer, except that the sender specifies the recipient's mobile phone number at the time the funds are sent. Recipients in Kenya must subscribe to the M-PESA service through Safaricom to access the service. | N/A | N/A |
| M-PESA 1tap | M-PESA 1Tap is the faster way to pay with MPESA. Using a card, phone sticker or wristband device that is connected to your M-PESA account, you can easily and securely make Lipa Na M-PESA Buy Goods and Services payments. With M-PESA 1Tap, you simply tap, enter PIN to pay and go! | May 2017 | May 2017 |
| M-PESA Global | M-PESA Global enables M-PESA registered customers to send and receive money globally. M-PESA customers will be able to send funds; To East Africa: Rwanda, Tanzania & Uganda Globally: To millions of Bank accounts and over 500,000 Western Union locations globally. PayPal: M-PESA registered customers will receive the funds from abroad on their M-PESA account. M-PESA customers can access the service by dialling *840# >Accept terms and conditions to Opt in > Select send money abroad on mySafaricom App. | N/A | N/A |
| Safaricom Neon Smartphones | Safaricom Neon phones are low-cost, entry smartphones costing below KSh.5,000/= marketed by Safaricom designed to have more Kenyans move from feature phones to smartphones. Since 2018, they've launched many models including: Neon Kicka, Neon Ray, Neon Storm and Neon Ray Pro | 2018 | 2018 |

#### South Africa

In September 2010 Vodacom and Ned bank announced the launch of the service in South Africa, where there were estimated to be more than 13 million "economically active" people without a bank account. M-Pesa has been slow to gain a toehold in the South African market compared to Vodacom's projections that it would sign up 10 million users in the following three years. By May 2011, it had registered approximately 100,000 customers. The gap between expectations for M-Pesa's performance and its actual performance can be partly attributed to differences between the Kenyan and South African markets, including the banking regulations at the time of M-Pesa's launch in each country. According to Money Web, a South African investment website, "A tough regulatory environment with regards to customer registration and the acquisition of outlets also compounded the company's troubles, as the local regulations are more stringent in comparison to our African counterparts. Lack of education and product understanding also hindered efforts in the initial roll out of the product." In June 2011, Vodacom and Nedbank launched a campaign to re-position M-Pesa, targeting the product to potential customers who have a higher Living Standard Measures (LSM) index than were first targeted.$^]$
Despite efforts, as at March 2015, M-Pesa still struggled to grow its customer base. This comes as no surprise as South Africa is well known for being ahead of financial institutions globally in terms of maturity and technological innovation. According to Genesis Analytics, 70% of South Africans are "banked", meaning that they have at least one bank account with an established financial institution which have their own banking products which directly compete with the M-Pesa offering.

#### Tanzania

M-Pesa was launched in Tanzania by Vodacom in 2008 but its initial ability to attract customers fell short of expectations. In 2010, the International Finance Corporation released a report which explored many of these issues in greater depth and analyzed the strategic changes that Vodacom has implemented to improve their market position.[23] As of September 2021, M-Pesa in Tanzania has 12.66 million subscribers

#### India

M-Pesa, was launched in India as a close partnership between Vodafone India and ICICI bank in November 2011 under the leadership of Mr Suresh Sethi. The service today operates in all telecom circles where Vodafone India is present. Users (of any telecom operator) can activate the M-Pesa service by downloading the Vodafone M-Pesa app (available on all app stores) on to their phones and registering themselves or by visiting any Vodafone store, Vodafone mini-store or M-Pesa agent point across the country. Customers of Vodafone can also activate the M-Pesa service by dialing *400# from their mobiles and completing the registration process. Using the *400# (USSD) facility allows Vodafone customers to avail of the benefits of M-Pesa without having a smartphone or a data connection. Registration is entirely free of charge.
A customer who activates his M-pesa wallet by only providing his basic demographic details and not sharing any proof of identity is enabled as a minimum KYC customer on M-Pesa. A minimum KYC customer of M-Pesa can not do money transfer (P2B, P2P) from his wallet account but can avail services like recharges (Prepaid mobile/DTH), bill payments, merchant payments, EMI payments, utility payments, insurance payments etc. They also have a monthly /daily/per transaction limit of ₨.10,000/-. If a minimum KYC M-Pesa customer wants to avail of bank transfer facility/increase his or her monthly transaction limit, then he or she can do so by doing their KYC using their Aadhar at any Vodafone store or M-Pesa agent point.
M-Pesa in India operates under two licenses, the PPI (Prepaid Payment Instruments) license issued by the Reserve Bank of India and the business correspondent license issued by ICICI bank. M-Pesa has also received in -principle nod of the regulator to set up a payments bank in India. Vodafone M-Pesa is the largest business correspondent channel in India with 1.5 lac+ M-Pesa agents who are enabled to provide cash-in, cash-out and assisted payments facility to M-Pesa customers.

## Shareholding

In 2008, reports appearing in the cross section of the press indicated that Vodafone Plc of UK only owned 35% while the remaining 5% was owned by a little-known company, Mobitelea Ventures Limited. The reports caused a stir which led to the summoning of its CEO Michael Joseph to appear before the PIC "Public Investment Committee", where he denied knowing who the other shareholder is. A spokesman for Vodafone said "the PIC has no powers to investigate M&A activity (see Mergers and Acquisitions), only to ask to view company accounts of Vodafone Kenya Limited, a company registered in Kenya. Mobitelea Ventures Limited were granted an option to purchase 25% of Vodafone's shares which they completed in 2002, Vodafone bought back half of the stake in 2003 for $10 million, and in the financial year ending 31 March 2009 purchased the remaining indirect equity stake of 5%, thus returning Vodafone to its original 40% stake-holding. Vodafone said that whilst it would like to disclose who owns Mobitelea it is unable to because of a confidentiality agreement.
As of December 2017, the company's stock was owned by the following public and private entities. The stock of the company is listed on the Nairobi Stock Exchange, where it trades under the symbol: SCOM.
Safaricom Stock Ownership :
| Rank | Name of Owner | Percentage Ownership |
| 1 | Government of Kenya | 35.0 |
| 2 | Vodacom | 35.0 |
| 3 | Vodafone | 5.0 |
| 4 | Retail investors via the Nairobi Stock Exchange | 25.0 |
| | Total | 100.00 |

## Controversy
### Tracking and extra-judicial killings of Safaricom subscribers

On 29 October 2024, the Daily Nation reported Safaricom to be involved in abductions and extra-judicial killings by police by using Safaricom call detail records (CDRs) to track its subscribers without valid court orders. According the article, Safaricom CDRs used to locate its subscribers are routinely accessed contrary to due process and procedure, e.g. without police occurrence book entries or occurrence book entries obtained informally then used to track and either abduct or kill specific safaricom subscribers.
The investigation also alleged that Safaricom produced inconsistent, redacted or false records before courts. For example, on 8th February 2022, a court ordered Safaricom to disclose call records about abducted Safaricom mobile subscriber Trevor Ndwiga, but the records produced contained inconsistencies such as placing Ndwiga at vastly different locations at the same time. The investigation further alleged that in January 2017, Safaricom produced inconsistent records regarding a case where the Kenyan intelligence officers collaborated with South Sudanese intelligence officers to abduct two South Sudanese activists who were "probably executed", according to UN experts' analysis.
On 31 October 2024, Safaricom denied the allegations of violations of its subscribers privacy without addressing the specific cases that were published where Safaricom was alleged to be complicit in abductions and extra judicial killings. In November 2024, Safaricom suspended advertisements with the Daily Nation and related publications such as Business Daily due to the publication of Safaricom's violation of its mobile subscribers privacy and other critical coverage of the company. On 15 November 2024, various civil society organisations including the Kenya Human Rights Commission and Muslims for Human Rights demanded that Safaricom address the specific allegations regarding passing CDRs to security agencies without court orders, manipulation and falsification of records, failing to hand over data regarding extra-judicial actions by state forces, retention of data that Safaricom claimed to have deleted, and developing software with British company Neural Technologies Limited to grant security agencies unfettered access to private consumer data used to track and profile safaricom subscribers.