Nearly a million Kenyans have tapped smartphones put on sale by Safaricom under its Sh20-a-day credit plan in the year to March this year.
The revelation by Safaricom underlines the preference of Kenyans struggling to make ends meet to acquire essential goods on credit.
There has been an upsurge in the usage of "buy now, pay later" services, which allow consumers to easily split payments for purchases into instalments in the past year amid a deteriorating cost of living crisis.
Safaricom has since 2020 been offering smartphones on credit to its subscribers who then make daily payments of as little as Sh20 for up to a year as the firm seeks to ramp up data revenues.
The telco has partnered with American social media giant Meta (formerly known as Facebook) on the affordable smartphone plan.
The plan has seen an uptake of 937,800 gadgets in the full year ended March this year, says Safaricom.
Uptake of smartphones
"Meta supports the Lipa Mdogo Mdogo (LMM) service, which aims to promote the uptake of smartphones in the low-income market segment," said Safaricom.
"LMM offers affordable smartphones in instalments from as little as Sh20 daily, with over 900 000 customers benefiting in the financial year 2023."
Safaricom has set a target of one million affordable smartphones, under the plan, according to Chief Executive Peter Ndegwa.
"We facilitated opportunities for (Safaricom) dealers to sell Lipa Mdogo Mdogo phones," said Safaricom.
"The total number of phones sold through Lipa Mdogo Mdogo was 937 800, of which 243,890 were sold by dealers in financial year 2023."
The plan was aimed at converting about four million 2G and 3G-enabled phones on Safaricom's network to 4G.
The telco says it had 20.3 million smartphones on its network in the year to March this year, which was up from the 18.5 million smartphones in a similar period last year.
Out of all the 20.3 million smartphones on its network in the period, 13.2 were 4G-enabled smartphones.
Safaricom has been seeking to rev up its data business to offset sluggish growth in mobile calls, where it has seen a small revenue growth due to saturation, forcing the firm to turn to M-Pesa and the internet to power future growth.
The region's most profitable telco is under pressure to diversify its revenue streams from voice, short message services, cash transfers and payments.
The telco, part-owned by South Africa's Vodacom and Britain's Vodafone, is keen to create new revenue streams as its voice business matures.
Safaricom has consequently been seeking to capitalise on rising mobile internet use in the country.
"A lot of our consumers are still on 2G and to some extent 3G devices. That's the reason we are saying even if you have 4G coverage... you need to start improving access to devices," said Mr Ndegwa at a past event.
"It is an innovative way of allowing customers to get a device that they would otherwise not be able to afford. If you have an app, you can't use it on a 2G phone."
Data is one of Safaricom's fastest-growing revenue lines, and the telco hopes that increased smartphone usage will boost the bottom line.
Education or other uses
"We want to democratise the use of data, whether it's for education or other uses," said Mr Ndegwa.
Safaricom revealed last year it would target residences and commercial offices in areas that are not currently served by its fibre network after it rolled out its new high-speed internet.
The telco last year launched Kenya's first fifth-generation (5G) mobile internet services commercially after a successful pilot, making it the first mobile phone operator to offer the service in East Africa.
The 5G service is a central part of Safaricom's attempt to further expand its data business to counter slower growth in voice calls revenue.
bngugi@standardmedia.co.ke
