It is all systems go at Safaricom as the firm changes guard

By Morris Aron

Employees of telephony giant Safaricom can now rest easy after Bob Collymore, the firm’s new chief executive, said there would be no lay-offs even as the firm smoothens its management style to a more consultative one characterised by clearer employee role definitions.

Speculations had been rife that a number of employees were to be shown the door — on redundancy and role duplicity grounds — as Safaricom cuts costs and moves from the aggressive take-off stage to a more structured organic second growth phase.

"There are no intentions to have anybody leave Safaricom as we have a pipeline of innovations that we are working on and will launch to push us to the next growth level," said Collymore.

"What will happen is that we will adopt a more consultative management style, where everybody has a clear job description of their tasks and reporting lines."

Industry analysts had earlier argued that Safaricom may be forced to undertake cost cutting measures, including lay-offs, to counter declining revenues brought about by the recent onset of stiff competition on voice and data segments. These are key revenue earners to the company, whose decline may herald a drop in future profitability.

In addition, many had projected that with Safaricom growing past a take-off stage into a more stable telecommunication company, established chains of commands and structures would necessitate such lay-offs on the basis of redundancy.

Large imbalances

But speaking exclusively to The Standard, Collymore said his priority would be to strengthen the Safaricom network, move it ‘to the social media’, and focus on innovative ways to capture the youth market, including the possibility of special tariffs for the group.

The firm has experienced service disruption since Tuesday night and Wednesday morning following a cable cut at Museum Hill area. The firm said the network black out, which affected voice calls and other services, was caused by a fibre optic cable cut due to road construction works taking place on Museum Hill road. The cut affected three cables, impacting even the lines that would have offered redundancy. Normal services resumed around midday yesterday.

"My priority is to make the network clearer, and look for ways to entice the youth to use our various data applications," he said.

"I believe future growth of any telecommunication company will be driven by its ability to maximise on data applications, rather than previous emphasis on voice call."

In August, Zain, soon to be Bharti Airtel, ignited a price war in the mobile telephony markets by cutting its calling rates 50 per cent to Sh3 per minute. Since then, mobile phone operators have had to cut their voice and data call costs by between 50 per cent -75 per cent, a development that may see revenues from the market segment drop. The facts will be established next week, when Safaricom announces its half-year results.

On innovation, Safaricom is already working on a number of applications that will allow the rural poor to be diagnosed and treated remotely, and see the telephony giant establish education platforms through the mobile handset and mainstream Internet.

"As we go forward, it will be more clearer that our intention is capture the data market," said Collymore.

Collymore took over the reins from Michael Joseph, becoming the new chief executive of Safaricom on November 1, at a time when sharp tariff cuts by rival operator Zain, owned by Indian group Bharti, have raised concerns about Safaricom’s future performance.