In 2020, Peter Ndegwa became the first Kenyan CEO of Safaricom. He took over the firm at a time its growth was slowing down and its core connectivity business, especially voice, had plateaued.
The telco's net profit for the full year ended March 2022 dipped 1.7 percent to 67.4 billion, the second drop in a row after it posted a 6.8 percent profit decline last year. The Business Daily sat with Mr Ndegwa to hear him take stock of his first two years and the new path he is charting for Safaricom.
It is two years into your role as Safaricom CEO. How has it been?
Suppose I could say it does not feel like two years, it feels like 10? Time has flown quicker than I thought. I think it has been about settling into the country, settling into a new organisation but also trying to shape the future and dealing with a crisis called Covid.
You came into the company as an outsider; were you under a lot of pressure, especially as the first Kenyan to head Safaricom?
This has been a very rewarding experience as an individual from a leadership perspective. I have been a CEO before, so that was not daunting. But coming in and managing through a crisis and setting the next vision was one of the big things that I had to work on in a role where you are at the centre of attention.
How did you deal with the attention and pressure?
I am a person who can deal with attention very easily because I just get on with things. The noise does not bother me, and it has not bothered me. It is a big part of a CEO’s role especially when you are managing a big organisation.
How you manage yourself is an important part of how you manage your organisation. But it is also just confidence in myself. And not being bothered by what social media says.
When you came in you brought a lot of changes. You must have ruffled a lot of feathers?
Transitions are always periods of anxiety for the organisation, and teams. So managing transition is a leader’s job so to speak, and you have to be aware of what you are managing.
Safaricom was a successful telecoms business with a big and successful payment platform. And now we wanted to broaden it. Then that has implications on the type of skills we have and the type of capability we have so that we make the organisation agile.
Most tech companies around the world are agile and put their commercial talent together so that they produce innovation and products on an agile basis.
How do you want Safaricom to change?
In 2020 during Covid, believe it or not, we got a new strategy signed off by the board in October to become a purpose-led technology company.
Ethiopia is very important so working in 2020 and 2021 to get a licence was a big one. We are starting to think about expanding mobile financial services.
And although payment was going to continue to be an important one, we started to think about how it will evolve in future — and so going to the super app both for individuals and businesses. Also, we started to think about the next generation of financial services — wealth management, savings and insurance.
Do you think Safaricom has finally hit a plateau?
Growth has been slowing down, our core connectivity business especially voice was slowing down.
Connectivity will continue to be an important business, especially mobile data, and fixed data at home.
We are still at about 20 to 25 percent penetration of homes; so, we still have 800,000 homes to go after. For mobile Internet, 4G penetration is a quarter and three-quarters of Kenyans do not have a 4G handset.
Tell us about some of the new products you have lined up?
We have a rich pipeline. First of all, we have the Halal Pesa, a partnership with Gulf Bank to offer credit that is Halal.
We have launched the eVisa in partnership with Visa Card, which allows Kenyans to purchase products off the internet from abroad. We are going to be launching a junior account soon. There are also quite a few other products, on the wealth management side that are at different stages in terms of approvals. We intend to get almost 300 mini apps on the super app so it becomes a full marketplace.
What is your outlook on jobs under the current adverse market conditions and high inflation?
We hired 400 developers this year. However, if the economy is affected the business will be affected. I will be naive to think that when people are spending less on products they will spend more on airtime.
So we would be affected the same way other players will be affected and therefore we have to watch our costs. But we have a lot of other ways of cost adjustments. I do not think we are going to affect people at all.