Online firms make a killing reselling Safaricom data units


Safaricom chief executive officer Bob Collymore. FILE PHOTO

An increasing number of traders are making a killing by reselling Safaricom’s Internet bundles at lower prices than those charged by the telecommunications firm, exposing a loophole in the company’s pricing structure.

The firms, which mainly operate online portals, say they are able to sell Internet bundles at lower prices than Safaricom’s official rates by buying in bulk and then breaking them down into small bits for users.

The traders are gaining popularity among users who want to cut their expenditure on Internet services, although Safaricom on Monday said it has not licensed any third parties to resell its data bundles.

“What we are doing is simple, we buy huge capacity from Safaricom at discounted rates, split these into smaller units then resell them at prices lower than the market rates. For example, we sell 500MB at Sh299 compared to Safaricom’s Sh500,” said Innocent Raini, the proprietor of Data Business Sales Kenya, in a phone interview with the Business Daily.

Mr Raini has opened a business pay bill number with Safaricom, which customers use to buy data bundles online through M-Pesa, after which their Internet accounts are credited within minutes.

But Safaricom has denied licensing another party to sell data bundles.

“While we are aware that there are some providers who claim to offer discounted data bundles to their clients, we have not initiated any partnerships of that kind,” said Peter Arina, the general manager, of Safaricom’s Consumer Business Unit.

Mr Arina said Safaricom’s subscribers should either buy their data bundles directly from the company or verify that their vendor is authorised to sell legitimate Safaricom services. 

READ: M-Pesa, data drive Safaricom half-year profit to Sh14.7bn

Mr Raini started selling the bundles last year, mostly to individuals, but has now introduced a plan to cater for small businesses with low Internet budgets.

A look at the firm’s portal shows that 1GB Internet capacity goes for Sh899 while Safaricom sells the same capacity at Sh1,000.

Unlike Safaricom, which offers much smaller Internet capacities of even 40 megabytes at Sh50, the smallest quantity by Mr Raini is 300 megabytes, which he said gives the firm headroom to make some margin from the bulk purchases.

“We are introducing a new package for companies, 10GB at Sh5,200 which comes with 4GB night shift bundles,” read a posting on Mr Raini’s consultancy website, also related to another vendor, Data Bundles Sales Kenya.