Uncategorized

Is Safaricom’s Kes. 10 Billion Fiber Roll-Out A Precursor To A Triple Play Pivot?

Earlier this week I read an article in one of the Dailies in Kenya that Safaricom had started the process of investing a total of Kes. 10 Billion to roll-out a national fiber optic network country-wide. For some reason, I was taken by surprise by this development – not by the fact that Safaricom was laying fiber to expand its data network but the amount they are investing in total. It got me thinking that Safaricom could be planning something significant that could effectively redefine their business model.

The factors behind Safaricom’s business mean that services like M-Pesa as well as Internet data are the new cheese in the business. Well established services like voice are delivering diminishing returns due to the never ending tariff wars. On this basis, Safaricom is required to constantly re-think its value proposition lest it becomes disrupted by its competitors. When one considers that Safaricom is already the largest purveyor of voice and data services in Kenya, one has to wonder why they are investing so much in building a nationwide fiber network.

My initial hypothesis is that Safaricom intends to become a triple play provider, much like Zuku. What this would mean is that Safaricom is entering the market for TV and other streaming digital content, in addition to their existing voice and data services. It also means that Safaricom who have hitherto worked with the likes of Multichoice to stream their DSTV content via 3G to mobile devices could effectively become one of their competitors if they sign-up with content partners directly. It makes sense for Safaricom to go this route since its a market they currently have no foothold in and it potentially represents a massive business growth opportunity.

In terms of execution, the fact that Safaricom has over 17 million consumers registered on its network means that the whole problem of knowing who they are dealing with and what they do on their network is sorted – this would include geo-location details, monthly spend, etc so that they can offer the most ideal services to the right customer at the right time on fiber.

Secondly, Safaricom has M-Pesa which would enable them to provide payment services for users who could subscribe for monthly bundles or just pay for content on a pay as you go basis. This latter option is profound in the current market since consumers for instance would only pay only for watching what they want to watch. Safaricom would be able to control the streaming to set-top boxes. There would be no leaks or losses and many more customers could be reached via the pay as you go model for TV which is currently not available in Kenya.

Thirdly is that online real-time gaming is a largely untapped opportunity in Kenya. Therefore, using low cost gaming micro consoles like OUYA, Safaricom could open a whole new market where consumers can buy games online via Safaricom using M-Pesa and Safaricom will also provide the very broadband bandwidth needed for the gaming experience to be top-notch.

Lastly, Safaricom could will undoubtedly deliver fixed line voice and data services via its fiber network which would target consumers and businesses alike so that they do not need to get these services any longer from other fixed line telcos in Kenya like Orange. This triple play model is already used by other global telcos like Airtel who are not just mobile networks but also deliver TV content and other fixed line services.

Previous post

In A WhatsApp Addicted Africa Is BlackBerry's BBM Too Little Too Late?

Next post

Airtel Africa launches flat-rate mobile games offering with Nazara Technologies

No Comment

Leave a reply

Your email address will not be published. Required fields are marked *

eighteen + 2 =