Inside Safaricom's multi-billion shilling bet on AI

 

Safaricom PLC Chief Finance Officer Dilip Pal, CEO Peter Ndegwa and Safaricom Telecommunications Ethiopia CEO Wim Vanhelleputte during full year financial results announcement. [Wilberforce Okwiri, Standard]

As Safaricom embarks on its next phase under a new shareholding structure, the region's most profitable company is investing billions of shillings to embed artificial intelligence into its products and services and hedge against the loss from traditional revenue streams.

This comes even as analysts project increased demand for artificial intelligence applications and solutions as consumers seek out cutting-edge technology that is becoming more affordable and versatile by the day.

The telco's strategy is hinged on several key pillars, including financial services through its M-Pesa Super App, healthcare solutions, multimedia content streaming, agriculture and government payments.

This is part of the company’s strategy to transition from a telecommunications firm into Africa’s leading AI-driven technology service provider by 2030 as outlined by the firm’s executives in recent public disclosures.

“We are deploying network and broadening financial inclusion to ensure that customers have seamless access to the internet and intuitive digital services at scale,” said Safaricom Group CEO Peter Ndegwa during the company’s latest investor briefing.

“We are turning this and other core capabilities that we have into commercial engines, helping enterprise and public sector to digitise at pace.”

Data from the firm’s latest financial results indicates that it spent Sh55 billion in capital expenditure in Kenya in the last financial year, an increase of Sh3.7 billion compared to the previous period.

This included Sh16.4 billion in IT expenditure and Sh36.6 billion in network infrastructure in Kenya alone, with an equally significant investment in its Ethiopian subsidiary over the same period of time.

“AI is fundamentally shaping how we operate across the group,” said Ndegwa. “It is enabling how we design our products, engage our customers, manage networks, allocate capital and mitigate risk. We have already started to see early gains in improved customer personalisation and experience, fraud detection and mitigation and network optimisation.”

In April this year, the company launched My OneApp, bringing M-Pesa and MySafaricom App under one umbrella and powered by AI. The app enables consumers to access services such as balance queries, utility bill payments and invest in securities at the capital markets among other key services.

My OneApp is modelled around other Super Apps such as WeChat by China’s Tencent and is in keeping with trends and developments in global tech platforms like Uber and Amazon that, through acquisitions and partnerships, are seeking to broaden their product offerings within their ecosystems.

While the app's initial rollout faced some challenges with customers complaining about difficulties with onboarding particularly for those outside the country, the company says these were teething problems which are being addressed through the ensuing feedback.

“The app is now stable for customers on the latest version and about 80 per cent of those who are on the new app on the latest version have an improved customer experience,” Ndegwa said. “We are now seeing great adoption momentum with three million customers already on board.”

Safaricom’s other strategy in deploying AI revolves around Baze, its revamped multimedia content streaming platform looking to take on industry giants such as YouTube, Spotify and TikTok.

“Kenya’s creative industry market is estimated to be about US$4.8 billion (Sh624 billion) but the opportunity we see here is that one in four Kenyans is a content creator,” says chief consumer business officer Fawzia Ali-Kimanthi.

“If you’re looking for a business that you want to engage in and the numbers are telling you that one in four are content creators it tells you that there’s such a great opportunity.”

Through Baze, consumers can access video, audio, gaming and news content that is tailor-made for them using predictive algorithms that learn from users’ streaming history.

“We are going to create a mall or entertainment hub on our super app for discovery purposes of all our partners to make it easier for our customers to discover the content you are creating,” says Ali-Kimanthi. 

Safaricom anticipates that the success of Baze will be underpinned by significant investments in network connectivity and skills development over the years.

The company has in recent years seen mobile data grow to become among the leading revenue drivers. In the 2025-26 financial year, mobile data revenue grew 14 per cent to hit Sh83.4 billion, for the first time surpassing voice revenue, which stood at Sh81billion. 

The projected increased consumption of mobile and fixed data is expected to lead to an increase in mobile data revenue while at the same time delivering new income streams such as royalty commissions from creators, developers and partners.

As it embarks on its new five-year strategic calendar, Safaricom says its sights are firmly set on having AI play a central role in the development and rollout of its products and services.

There are, however, some headwinds that the company will need to address in the near-to-medium term.

This includes concerns around data privacy and the sustainability of AI development that continue to shape regulatory policy in the region and in the country. Discussions around the ethical responsibility of AI platforms to mitigate the environmental impact of data centres for example, will likely have an impact on future investment decisions.

Safaricom has also seen the exit of several high-profile executives who have been with the company for a long time and had a central role in the development of the current strategy.

Recruiting new top talent while navigating an increasingly competitive fintech sector could present a challenge in executing the strategy within the desired timelines.