Safaricom eyes stake in new sectors with 5G rollout

Safaricom #ticker:SCOM plans to partner with the government and corporates in revving up its newly launched fifth-generation (5G) mobile Internet services through which it wants to deepen innovation in sectors such as health and agriculture.

The telco on Friday launched the upgraded network in major urban centres including Nairobi, Kisumu, Kisii and Kakamega— all of which routinely witness increased data traffic.

Safaricom becomes the first operator to offer commercial and superfast 5G services in East Africa.

Its chief executive officer Peter Ndegwa says he now sees partnership opportunities in telehealth, telemedicine and agriculture through value addition in other sectors and platforms.

“The 5G network heralds the era of intelligent connectivity and will be a key driver of this strategy by enabling us to build on the investments and successes of the last two decades to catapult Safaricom to the next level as we enable digital lifestyles of Kenyans,” said Mr Ndegwa in Nairobi.

“The next phase of our journey, which is to become a purpose-led technology company by 2025, will see us go beyond for our customers to continue driving innovation in ecosystems such as health, education, agriculture, financial services and enabling SMEs using technology.”

The 5G technology will be supplied by Nokia Corporation and Huawei—which has been the subject of increased scrutiny in the Western world with Washington accusing it of working at the behest of Beijing.

Safaricom subscribers who want to use the service will need to acquire new handsets that are compatible with 5G before they can enjoy the superfast Internet, which offers much faster data download and upload speeds that ultimately ease network congestion.

Speaking at the launch ceremony ICT Secretary Joe Mucheru said the new network will enable the leading telco roll out newer services needed in the local economy.

“The launch of 5G by Safaricom dovetails into the government's efforts, what the citizens need, and the current trend world order…Other than telemedicine, other sectors have also embraced technology-enabled platforms for business continuity,” he said.

Communications Authority acting director general Mercy Wanjau said the regulator is encouraging more operators to roll out faster, stable and reliable broadband services.

Safaricom will seek to capitalise on the rising mobile Internet use in the country. The 5G service is a central part of its attempts to further expand its data business to counter slower growth in voice calls revenue.

Safaricom has seen web data revenue grow more than three times over the past five years to Sh49.6 billion last year.

The 5G launch follows the December 2015 unveiling of the 4G network.

Kenya had 58.9 million mobile subscribers in the quarter ended September. Of those users, around 42.8 million had mobile data subscriptions, with Safaricom enjoying dominance in this segment. 

Data from CA shows that Safaricom grew its mobile subscriptions 4.2 per cent to 38.144 million in the three months ended September. Safaricom’s net profit for the six months through September fell by 6 per cent to Sh33.06 billion.