Safaricom still reigns Supreme…

yesterday introduced to its myriad of value additions the one that has just done it for me (in a good way). I had written earlier (Safaricom: LandMark Ruling) giving reasons why the other players currently flooding the market will not even scratch the numbers of Safaricom subscribers. The price wars have started as expected, but perseverance is key in this industry. Some prices being offered are definitely taking a huge toll on these new entrants, and how long they can last with such low prices is the question that should be most pressing. But the consumers are not complaining, and if it can go on forever, the better. But I bet you that no business fundamentals can support and sustain such prices in the long-run. This is a marketing gimmick that is meant to entice subscribers to “VUKA” or cross over to the new kids on the block.

But what are they coming up against. First of all, they are facing a subscriber with over 12 million subscribers and the number is growing by the day, fueled by its value additions which have become the order of the day to any subscriber and their families, colleagues and friends. The most pronounced of these value additions has been M-PESA, a mobile bank that has made our tiny phones the smallest and yet the most secure safes out there and which as opposed to banks, have the greatest reach since they are with us wherever we go. I said it before and I will say it again, unless these new entrants can compete on the these value addition levels, they will not even come close to being considered a threat to Safaricom, which for your information, also has greater firepower than the new entrants and they foreign financial muscle as a result of the just concluded IPO which gave it 50 billion big ones.

I started by saying that the new Safaricom value addition has just done for me. Yesterday, they signed a deal with Old Mutual Investment firm that would allow Safaricom Subscribers to deposit their monthly payments to the newly created Toboa Investment option offered by Old Mutual. I am an investor at heart and what could be better than sending my monthly subscriptions to my unit trust account without the hassle usually associated with banking the money? This will definitely excite fellow investors as it has me and I bet more Investment firms will consider this the way forward, and who better to approach for this service than the pioneer of it who is also the one with greatest subscriber numbers in the country.

The case is simply strong for Safaricom and at this point, all I can say is that Zain, Econet Wireless and Orange have just gotten one more value addition that they need to add on their to do list.