Safaricom scrambles to shore up Gen Z market in wake of protests

Safaricom CEO Peter Ndegwa during The launch of Spark Accelerator - a program to support start- ups at Micheal Joseph Centre, Safaricom House in Nairobi on January 12, 2024 [Boniface Okendo, Standard]

Last week, Safaricom sent out an invite for a media forum aimed at “demystifying the inner workings of the internet and the journey of data across the globe.” 

Headlined by several experts from the ICT sector, the event promised to “provide an essential understanding for media professionals on how the internet functions, the pathways data takes from one point to another, and the potential disruptions that can impact internet connectivity.” 

At the last minute, however, the event was postponed by an hour and then later cancelled indefinitely.

The same day, the telco announced a donation to the Kenyatta National Hospital (KNH) to aid the victims of police brutality and a new initiative, #GenzforGenZ, a community and volunteer initiative targeted at the youth. 

This was happening in the background of anti-government protests that rocked several parts of the country and left more than 39 people dead and dozens of others injured. 

Safaricom found itself in a tight spot over reports of internet throttling when users across the country experienced outages and slow connections for hours during the protests. 

When protesters stormed Parliament on June 25, many internet users reported slow connections, with some apps like X inaccessible, pushing some to install virtual private networks (VPNs). 

Safaricom Chief Executive Peter Ndegwa was compelled to issue a statement amid mounting calls for a boycott from activists and online influencers who have in recent years formed the bulwark of the telco’s marketing and PR programmes. 

“I want to start by sincerely apologising for the network outage that started on June 25, 2024. This outage was occasioned by reduced bandwidth on some cables that carry internet traffic,” said Mr Ndegwa. 

“Please note that this did not only affect Safaricom but also impacted the whole industry. We are doing everything to ensure that we provide the service you deserve.” 

Internet monitoring group NetBlocks reported a major disruption to internet connectivity in the country on June 25th that also affected other countries in the region. 

According to NetBlocks, no physical subsea cable damage had been identified as yet and the impact in Kenya was worse than in past cable cuts. 

“The ongoing internet disruption has impacted Kenya as well as neighbouring countries including Uganda and Burundi,” explained NetBlocks in a preliminary report. 

“While Kenyan network operator Safaricom now states that two of its undersea cables have experienced outages, the root cause of the current internet disruption remains unexplained at the present time.” 

This is not the first time Safaricom has come under fire over reports of internet throttling. During last year’s Kenya Certificate of Secondary Education, KCSE exams, the Open Observatory of Network Interference, OONI reported that the app Telegram was being blocked in the country. 

“For the first time we are observing the blocking of Telegram in Kenya,” said OONI.

“Amid national exams, OONI data shows intermittent signs of Telegram blocking on several networks. The timing of the blocks correlates with the timing of the exams.”   

Last year, Safaricom Ethiopia shut down its sites in the Amhara region after the Federal Government declared a state of emergency. 

This time, however, calls to boycott Safaricom seem to have rattled the country’s leading telco and sent its business leaders scrambling to save face.

The firm’s share price dipped five per cent in the 48 hours following the storming of Parliament when the boycott calls hit their peak. 

Part of the reason for the moral panic is that calls for a boycott of the telco and its services are coming from the youth demographic, which forms the bread and butter of its multi-billion-shilling operation. 

More than half of Kenya’s population is under 25 years old and the 19-25 age demographic makes up an essential demographic for companies working in the fast-moving consumer goods (FMCG) segment. 

Safaricom has, particularly been steadfast over the years in ring-fencing its youthful consumer base, with its penchant for video streaming and engaging with multiple apps that translates to billions in data and payments revenue.    

Calls for a boycott from this lucrative market segment are thus a significant cause for concern for the telco. Safaricom has also witnessed first-hand the impact that a boycott campaign can have on subscriber numbers and market share. 

Following the contested presidential elections in 2017, opposition leaders led by Raila Odinga called for a boycott of Safaricom for what it termed collusion with the state.

Data from the Communications Authority of Kenya (CA) indicates that Safaricom’s rival Airtel gained an additional 1.2 million subscribers in the quarter following the boycott calls. 

The protests sparked by the country’s youth in recent weeks have brought to sharp relief the delicate balancing act facing Kenya’s leading telco. 

The government not only owns a 35 per cent stake in the company and its profits, Safaricom also powers revenue collections at the national and several county governments and provides connectivity to numerous State agencies and departments. 

On the other hand, this proximity to the government can turn caustic amid growing anti-government sentiment and hurt the company’s bottom line should consumers make good on their boycott threats.