Safaricom's new CEO says fixing network a priority

NAIROBI, Tuesday

Telecom operator, Safaricom, aims to keep costs down to counter increased competition and drive up revenues from data services to help earnings growth, its new chief executive has said.

Bob Collymore speaking on his first day as CEO on Monday, said a priority would be fixing network gaps.

"Those (short-term priorities) will be about fixing the gaps in the network that we have now," he said, referring to difficulties in making calls at peak times in Nairobi.

He has taken over from the group’s founding CEO Michael Joseph at a time when sharp tariff cuts by rival operator Zain, owned by Indian group Bharti, have raised concerns about Safaricom’s future performance.

"The thing that the market can expect is a fierce kind of competitive response. If people believe that because there is a new leader we are not going to be as competitive as we have done before, that is not going to happen," Collymore said.

Reduced calling rates

The price war ignited by Zain in early August had ended after the other operators reduced their calling charges in order not to lose customers, he said. But the cuts had not resulted in significant demand elasticity. "People are speaking a little bit more but the elasticity is not three times or four times. The elasticity will continue as peoples’ calling habits and patterns change but you cannot change their culture," the CEO said.

Safaricom, part-owned by British operator Vodafone, is the leading mobile phone operator in Kenya with 16 million users, or close to 80 per cent of the market.

— Reuters