The 3 Pillars Peter Ndegwa wants to focus on for the continued growth of Safaricom

by Odipo Riaga · April 1, 2020

After several years of back and forth between the top two shareholders of Safaricom namely The Government of Kenya and Vodafone Group over who would succeed Bob Collymore, Safaricom finally settled on Peter Ndegwa, Managing Director at Diageo. The announcement that Peter Ndegwa would take over as the CEO of Safaricom came on October 25th 2019, but Peter would have to wait until April 1, 2020 to officially take over the management of East Africa’s largest company. In the meantime, former CEO and Founder of Safaricom Michael Joseph had stepped in as acting CEO.

Today is April 1, 2020, the day Peter Ndegwa takes over the leadership of Safaricom amidst coronavirus pandemic that has gripped the world, forcing the new CEO to succeed Bob Collymore from the comfort of his home. As he does so, the question everyone wants to know is what he wants to focus on first. According to this Business Daily article, Peter Ndegwa will channel his focus on Data, MPESA, and Geographical Expansion.

The data Peter Ndegwa wants to focus on is not what most of you would like him to – that is lower the price of mobile Internet data. No, the data he wants to focus on are figures or details about the markets that will be of interest to the growth of Safaricom, the data that has been defined as “facts and statistics collected together for reference or analysis”. What this means is that Peter Ndegwa wants Safaricom to do a wider and more robust data collection on certain fields, and in particular he wants Safaricom to expand its data collection on farmers and farming, health, and education “Learning from home (during the coronavirus outbreak) has created opportunities in education through e-learning. We are also looking at how innovation can help us deliver services in healthcare and agriculture”, the new CEO said in an Interview.

On farming, Safaricom already offers DigiFarm, a platform for offering “farmers convenient, one-stop access to a suite of products, including financial and credit services, quality farm products and customized information on farming best practices”. Similarly Safaricom has health services through their insurance products such as Linda Jamii where they claim to deliver “affordable Family Healthcare Plan”. For both farming and Health therefore, what Peter Ndegwa must be aiming to achieve is to diversify and expand Safaricom offerings in these sectors.

Education however seems to be a green field for Safaricom to explore. Coronavirus has made it possible for organizations and governments everywhere to see the need to make learning from home a possibility if not a necessity. As the world move forward, e-learning is not just going to be left for post high school education but every level of schooling must be integrated within this new paradigm, and here is where companies like Safaricom must step in to leverage their technologies. As this new frontier opens up, we of the media can only promise you to keep an eye on the developments so as to keep you abraced with whatever it is Peter Ndegwa plans to do in this sector.

Then there is the focus on MPESA that Peter Ndegwa hopes will continue to rake in revenues for Safaricom. Since 2007, MPESA has done nothing but to grow both in subscriber numbers and revenue. In the next few years the growth in subscriber numbers is expected to flatten given that by mobile phone subscription the country is already past 100% penetration. Revenue source for MPESA cannot therefore be expected to come from new subscribers, but rather from new market places. Safaricom has over the years tried to provide Pay Bill and Buy Goods to almost every business, but their approach might need to change as several businesses are already shying away from Buy Goods Till Numbers. This is because in addition to charging a flat commission of 1% on money received in the Till Number, Safaricom still charges the businesses the usual withdrawal fees that you and me are charged when withdrawing money from MPESA. That’s something Peter Ndegwa must pay a closer attention to, as convincing every business including the mama mbogas to operate Till Numbers will be the way to encourage a truly cashless Kenya.

Through MPESA Peter Ndegwa wants to target insurance services too. “Safaricom will be looking to upgrade the capabilities of M-Pesa to include buying insurance and investing in wealth management, a move that would put the firm in direct competition with Insurers”, reckons Business Daily. I am not sure how buying insurance will put Safaricom in direct competition with insurers, for what it seems is that what Safaricom will make possible is for insurers to leverage on MPESA when it comes to collecting premiums on their respective insurance products. If the approach would be similar to what Safaricom has with M-Tiba, then what insurance companies can do is to join hands with Safaricom to offer their insurance services through MPESA powered getways.

Peter Ndegwa is also stepping into Safaricom at an interesting time, a time when Safaricom has been allowed to step its feet outside Kenyan borders. Initially when Safaricom was under the majority ownership of Vodafone Group, Safaricom was not allowed to operate outside Kenya as such operation would put it in direct competition with with Vodafone owned Vodacom businesses. But once Vodafone transferred its shares to South Africa’s Vodacom, Safaricom was allowed to now venture outside Kenya, and Safaricom’s first step was to seek a stake in Ethiopia’s rich telecommunication market. The bid to obtain an Ethiopian telecommunication license by Safaricom is expected to go down this month, and how the bid turns out may be the first milestone or the first dent in Peter Ndegwa’s reign at Safaricom.

As Peter Ndegwa focuses on his three pillars of data, MPESA and geographical expansion, it is important for him not to lose focus on what Kenyans really care about namely quality services and instant customer care response. Since Bob Collymore died, these two critical pillars of Safaricom have been on the downward path, and hopefully Peter Ndegwa will be able to recognise the luxity with which MJ took those critical foundations so as to take them back to where they used to be.