Safaricom Targets Higher-Earning Kenyans in Data-Bundle Growth

Safaricom Ltd., Vodafone Group Plc’s Kenyan unit, is targeting data-revenue growth from an online-television service for the country’s expanding middle class, Chief Executive Officer Bob Collymore said.

Safaricom has applied for a broadcast license to use its Big Box, a digital-TV set-top device, as a wireless hotspot that allows users to buy data bundles and download content onto TVs, Collymore said in an interview on Friday. That will create an alternative means of going online in a country where fixed-line Internet connections are scarce.

“It’s a data play,” he said at the World Economic Forum in Cape Town. “Today my average user is using 100 megabytes of data a month, and we have to move from 100 megabytes to something that starts with a G,” he said, referring to the larger gigabyte.

Mobile-phone companies in Kenya have been investing in Internet-enabled services as customers increasingly turn to smartphones and tablet computers rather than fixed-line broadband as a means of communication and mobile banking. Safaricom, 40 percent owned by Newbury, England-based Vodafone, had more than two thirds of mobile-phone subscriptions in East Africa’s biggest economy at the end of last year.

Kenya’s economy is expected to grow by 6.9 percent this year, exceeding the 4.5 percent average for sub-Saharan Africa, according to the International Monetary Fund. Meanwhile the number of middle-class households in the region has tripled since 2010, according to Standard Bank Group Ltd.

Safaricom shares declined 1.8 percent in Nairobi to 16.05 shillings as of 1.42 p.m. local time, valuing the company at 643 billion shillings ($6.6 billion).

“If you need to have a TV decoder why don’t you put a data bundle into that TV decoder,” Collymore said. “Could you start to put some meaningful content on the box? Yes, you can, and for that you will need a license to do it and we are looking at other alternatives of getting some more specific content.”

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