Origin of ‘Safaricom’ name and the building of a dream

Joseph Ogutu, chairman of the Safaricom Foundation, was in the team that was involved in coming up with the name Safaricom. Safaricom became the new entrant in the mobile telecommunications market after Telkom Kenya and KenCell, which was then gearing up for a nationwide rollout.

22 Oct 2020 . 760 Views

“Poor is the pupil who does not surpass his master,” Leonardo Da Vinci once said. The idea is that for learning to have taken place, the student needs to get better than the teacher.

This was the underlying philosophy behind apprenticeships in the past when blacksmiths, carpenters, painters and musicians, among others, would take a student under their care and teach them the trade.

A version of this today is how tech companies have programmes and labs that encourage employees to experiment with projects and ideas, challenging them to come up with the next big thing. At Amazon, for example, this approach is credited for some of the company’s biggest products, including Amazon World Services and Amazon Prime.

In 1993 the Kenya Posts and Telecommunication Corporation (KPTC), a State monopoly charged with establishing and maintaining communications infrastructure in the country, created one such department.

The goal for the department was to experiment with the first-generation (1G) cellular network Extended Total Access Control System (ETACS).

Three years later, Kenya adopted the Global System for Mobile Communications (GSM), the standard developed to describe protocols for second-generation (2G) digital cellular networks.

The mobile revolution had rung home and in 1999 the KPTC department known as Safaricom applied for and was granted a licence as a mobile cellular operator and service provider for 25 years.

The name we gave our company was a mix of safari and communications.

Joseph Ogutu, chairman of the Safaricom Foundation, was in the team that was involved in coming up with the name Safaricom.

“We thought, ‘what is this country known for? Kenya is known for safaris. Tourists visit for safaris and local people also enjoy them,” he says. “And so the name we gave our company was a mix of safari and communications — Safaricom.”

Safaricom became the new entrant in the mobile telecommunications market after Telkom Kenya and KenCell, which was then gearing up for a nationwide rollout.

The company started off with 12,000 subscribers inherited from KPTC, which was now obsolete following the passing of the Kenya Information and Communication Amendment Act, 1998.

Soon after the official launch in October 2000, Safaricom hit the ground running. The company invested Sh3.7 billion (Sh8.4 billion in today’s value) in network expansion of the new 2G frequency with equipment for the first base transceiver stations provided by German company Siemens.

By the end of that year, Safaricom subscribers jumped from 20,000 to 300,000, setting the future growth trajectory of the company. The company was growing fast and some of the initial employees were naturally poached from the mothership.
Mr Ogutu joined the company in 2005 from Telkom Kenya and recalls with fondness the first years of growth.

“Safaricom was started as a joint venture between Telkom Kenya and Vodafone and from the onset the strategy was to take the mobile phone to the masses,” he recalls. “The idea was to include more people — particularly from the working class and informal sector — in the mobile revolution.”

Initially, the telco had a target to reach half million customers by June 2003 but the company was crashing through the first millionth customer mark by the beginning of the same year.

To this end, Safaricom introduced a toll-free customer service line on 100 that allowed all customers to call in case of any inquiries they may have.

In fact, the Safaricom customer call centre soon became a major feature in Kenya’s corporate scene and one that was later mimicked by other players in the ICT sector.

Per-second billing

Alongside this, the company launched per-second billing, at a time when competitors were charging subscribers per minute.

“The idea was that most people do not terminate their calls to the minute and Safaricom opted to only charge subscribers for the resources they used,” explained Mr Ogutu.

The result of these initiatives warmed new subscribers to Safaricom. In 2002, the firm launched the Sh100 scratch card and the Simu ya Jamii offering.

These market-driven innovations catapulted Safaricom to the top of the market and by the time Mr Ogutu was joining the firm, the company had crashed through the three-million subscriber mark.

“All of a sudden people had a communication tool in their hands and this was a major revolution,” he recalls. “One of the things that was different in Safaricom compared to the parent company was the approach to customer service.”

Safaricom was in the process of onboarding new subscribers as new base stations rose across the country and the primary focus was to provide an unrivalled customer experience.

Over the years, this approach has dictated the company’s growth strategy and resulted in what Safaricom is today.

The telco stands at the top of the market with more than 35 million subscribers and several product lines providing a revenue stream that is the highest among listed East African firms.

The student has become the master. “We have had a great journey in the last 20 years and achieved a lot,” says Mr Ogutu. “We have become part of the Kenyan psyche known as an innovative company and so much is expected of us going forward. The challenges ahead are big but if we work together, listening to the customer and providing what they want, we will conquer what lies ahead.”

This story was first published in the Nation Africa and is part of the Safaricom@20 celebrations. For 20 years, Safaricom has developed new technologies and innovations to support and enable Kenyans to communicate, connect and to go beyond.

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