OBG talks to Bob Collymore, CEO, Safaricom

Interview: Bob Collymore

What impact has devolution had on the regulatory environment for telecoms operators?

BOB COLLYMORE: There is a lack of clarity as to who does what. The risk for telecoms operators is multiple taxation. People tend to extract fees from any sector that is known to be generating obvious revenue for the economy. Counties that are not adequately funded often extract revenue from sectors like telecoms with new taxes, which is not fair.

Which key factors allowed for the rapid growth and uptake of mobile money?

COLLYMORE: First, the regulatory environment helped a lot because it followed innovation instead of the other way around. Usually, most markets fail because they try to regulate before the innovation comes on its own. In Kenya’s context, it was a favourable regulatory environment. Secondly, Kenya was largely unbanked as a society, which sort of opened the door to this type of innovation. Although you do not need to be unbanked to be successful in mobile money, there was a cultural element to it: Kenyans have a culture of sending money out. In the Kenyan environment, it is quite common to send money to people for basic day-to-day purchases. So that means moving money is one of the differentiating features in this country.

How would you rate the country’s state of readiness for e-commerce and online transactions?

COLLYMORE: Mentally, we are actually quite ready for it in Kenya. If you believe that you need to make global money work – which is something like having an electronic wallet – Kenya has been fully integrated in that league for seven years now.

Even the very lowest-denominated companies in the country are making use of it. However, there are still challenges for the spur of online transactions throughout the country: issues of trust are higher than average and the risk for fraud is still very high.

What challenges impede digital infrastructure?

COLLYMORE: One of the challenges we have in Kenya, in terms of rolling out the fibre optic, for example, is the lack of a global approach for providers. Every fibre provider digs their own trenches and puts their fibre down on an individual basis. When roads are being built, there is no tracking or provisions for the fibre. Basically, there is a lack of coordination at a county and a national level, for the last-mile connections. As far as radio infrastructure is concerned, it is a little easier, but becoming more and more complex with devolution. In addition to that, we must remember that in order to build a base station somewhere we need to build a road first, and the operators are often the ones who need to build these roads. Power is still not as widespread as it should be and it adds to the cost, which is another major challenge, in terms of infrastructure.

What sort of potential do you see for improving infrastructure-sharing within the region?

COLLYMORE: My personal perspective is that regional integration is a distant dream in East Africa. We are only starting to coordinate the fees for some international calling rates across the region. Even now, from Nairobi you can call New York for $0.05 per minute, while it will cost $0.38 to reach Kampala.

How can Kenya better encourage tech start-ups?

COLLYMORE: Innovation in Kenya is strongly driven by the dynamism of the private sector, in partnership with the institutions of new learning. There are solid hubs of new learning here and I am quite impressed by what I see coming up for young Kenyan developers and entrepreneurs in the ICT sector. Nairobi is a regional hub for ICT thanks to the good quality of its human capital. The workforce is well educated, hard working and always looking for solutions. The private sector and learning institutions must continue to innovate to keep leading the region.