Safaricom, led by Kenyan telecom mogul Peter Ndegwa, has launched a ground-breaking service that allows consumers to buy airtime for as little as Sh1 (roughly $0.0068) using their M-Pesa mobile wallets. This increase from the previous minimum of Sh5 (approximately $0.034) represents a strategic attempt by the telecom giant to tap into the low-budget customer group, with the goal of increasing revenue by making airtime more affordable.
This project demonstrates Safaricom’s dedication to inclusion by providing more flexible alternatives for its large customer base. In a recent announcement, Safaricom encouraged people to try out the newly active service. The company was enthusiastic about the transition, highlighting the importance of even the smallest purchases. Safaricom made a statement on Monday, saying, “Hata shilingi ni pesa! Sasa unaweza kununua Safaricom airtime ya kuanzia shilingi moja ukitumia M-Pesa,” which translates to, “Even a shilling counts! Safaricom airtime is now available for purchase using M-Pesa starting at Sh1.
Since taking over as CEO of Safaricom, Peter Ndegwa has initiated a number of initiatives targeted at increasing the company’s client base and revenue. The introduction of the Sh1 ($0.0068) airtime purchasing option is a critical component of his approach, aimed at millions of low-income customers who require more flexible spending options.
Safaricom’s rate structure now charges phone calls at Sh4.87 (approximately $0.033) per minute during peak hours and Sh2.50 ($0.017) during off-peak times, while text messages cost Sh1.20 ($0.0082). By decreasing the airtime purchase threshold, Ndegwa hopes to provide more cheap communication options to regular Kenyans, fostering stronger loyalty and increasing transaction volumes.
This new airtime plan follows another revenue-boosting change: a Sh0.50 ($0.0034 USD) daily fee for subscribers who exceed their two free calls each day. This change was seen as part of a larger strategy to eliminate freebies while increasing money generation. The Sh1 airtime option adds to this strategy by giving cash-strapped individuals a handy way to stay connected.
Under Peter Ndegwa’s leadership, Safaricom has consolidated its position as the dominant player in Kenya’s telecom sector. By the conclusion of the first quarter of 2024, the company held 65.5% of the local voice market, up from 63.3% in December 2023. This growth came at the expense of its main competitor, Airtel, whose market share declined from 36% to 33.96% within the same time period.
Despite having a vast subscriber base of 44.67 million subscribers as of March 2024, Safaricom’s revenue growth has been behind projections. One of the primary causes has been the popularity of cost-saving options such as the reverse call option, which allows users to pass on call expenses to the recipient. This functionality, which debuted in June 2019, has hampered the company’s ability to fully realize its voice income potential.
Nonetheless, Ndegwa remains committed to long-term growth, delivering innovative options like the Sh1 ($0.0068 USD) airtime option. This move is expected to attract budget-conscious customers, enhance daily transaction volumes, and add to Safaricom’s overall revenue growth, assisting the company in navigating its hurdles and remaining competitive in a developing market.
Through these efforts, Ndegwa continues to drive Safaricom toward long-term growth, with a strong emphasis on diversity and innovation.