Nipate
Forum => Kenya Discussion => Topic started by: RV Pundit on May 03, 2019, 09:30:55 AM
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Fuliza the overdraft facility - may end the year - having lend 200B! The banking sector would struggle to lend that much annually. This is the power of tech and it's ability to leapfrog. The usual suspect in 2007 when M-PESA started were dismissing it as mose code tech.
https://www.the-star.co.ke/news/2019-05-03-safaricoms-service-revenue-grows-to-sh240bn/
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That's OK but Safaricom potential is greatly UNDER-LEVERAGED. That company would sky-rocket if it embraced tech innovation. We can discuss the details.
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I would love to hear the details. I think it's hobbled by Vodafone - they cannot expand regionally - and secondly GOK - shareholding there is for treasury small dogs to ask for tenders and jobs.
Way forward is for GOK to sell it's 35% shareholding - and to somehow remove Vodafone stranglehold.
That's OK but Safaricom potential is greatly UNDER-LEVERAGED. That company would sky-rocket if it embraced tech innovation. We can discuss the details.
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Shareholding has little to do with it.. the Vodafone choke on M-pesa is one thing yes.
If you look closer you will see they have no LEVERAGE.. they need to change their mindset as simply "telecom" same way they broke the small box with mobile money. M-pesa has grown in one dimension - customer base - very organically, very slowly. Look at Ant Financial - if you got the Android or iOS app - nice features and worth 150B usd of course. M-pesa is 10B usd - 95% of Safcom value.
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Safaricom has practically a monopoly in Kenya.
In Uganda MTN and Airtel have each around 45% of the market. In Tanzania Vodacom dominates with about 35%. In Kenya Safaricom has 65% of the market.
So why should Vadafone allow Safaricom to go rival its sister companies in Uganda and tanzania? Vodafone is very comfortable with the situation in Kenya.
I would love to hear the details. I think it's hobbled by Vodafone - they cannot expand regionally - and secondly GOK - shareholding there is for treasury small dogs to ask for tenders and jobs.
Way forward is for GOK to sell it's 35% shareholding - and to somehow remove Vodafone stranglehold.
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Safaricom has practically a monopoly in Kenya.
In Uganda MTN and Airtel have each around 45% of the market. In Tanzania Vodacom dominates with about 35%. In Kenya Safaricom has 65% of the market.
So why should Vadafone allow Safaricom to go rival its sister companies in Uganda and tanzania? Vodafone is very comfortable with the situation in Kenya.
True but they literally launch new tariffs and Kocho Kocho as "innovation" :) Until they have Mpesa.JS or such talent leverage they are going nowhere. Big techs have leveraged the factors of production by deploying platforms, VCs, etc.
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safaricom is telcom company; (think at &t); not a technology company.
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safaricom is telcom company; (think at &t); not a technology company.
That's almost shocking from you. They should spin off - Mpesa and other subs - like Alibaba has done with Ant, etc. LittleCab is a good model. Equity has Equitel as a sub - where they have 60% share - Dr Mwangi & Equity CFO sit on the board.
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You just got to admire SoftBank - that's how to grow - and not to box yourself into a sectoral player like "telecoms".
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You just got to admire SoftBank - that's how to grow - and not to box yourself into a sectoral player like "telecoms".
Robina... you are onto something. Someone is going to eat Safcom's lunch at some point. Its sheer market dominance is going to be its undoing. They are a behemoth (in Kenyan terms) who aren't using their advantage to create even solutions to solve problems (while making money). Today it is lazy and lacking in innovation and all they do is do silly things like kochoKocho for innovation. Short term thinking... The time they would have scaled and run away with spin-offs and as a real innovator with collaborations with local innovators and start-up all they did was lead you on, steal your IP and quash you (local entreprise). Obviously not having been the originators of the ideas, they couldn't bring to market fruition. A lot of lazy bums there.
It is a shame really, all that money they make, they can innovate a lot (literally afford to make mistakes until they get it).
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Robina... you are onto something. Someone is going to eat Safcom's lunch at some point. Its sheer market dominance is going to be its undoing. They are a behemoth (in Kenyan terms) who aren't using their advantage to create even solutions to solve problems (while making money). Today it is lazy and lacking in innovation and all they do is do silly things like kochoKocho for innovation. Short term thinking... The time they would have scaled and run away with spin-offs and as a real innovator with collaborations with local innovators and start-up all they did was lead you on, steal your IP and quash you (local entreprise). Obviously not having been the originators of the ideas, they couldn't bring to market fruition. A lot of lazy bums there.
It is a shame really, all that money they make, they can innovate a lot (literally afford to make mistakes until they get it).
I was interviewed for head of engineering in 2017 and almost threw up in their face. Some HR woman kept saying am too young to be head of eng :o I declined the offer. But what you note from the brief encounter is the boxing of innovation or engineering as "software" or "data science" - wanting to know a to z of labwork which of course is not possible by definition. They have a mental block that hardware or devices can only be created abroad. Sfc needs to create PLATFORMS - to leverage the global engineering pool - same way they have done with the distribution side - they need as many engineers as they have mpesa or airtime agents. They should have a solid platform - cloud, devices, OS, SDKs, app store, etc. Complete with Developer Conferences or Open Days. Like FB or Google or whoever - and firmly own the base - which can be spirited away anytime. Sitting ducks.
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Robina... you are onto something. Someone is going to eat Safcom's lunch at some point. Its sheer market dominance is going to be its undoing. They are a behemoth (in Kenyan terms) who aren't using their advantage to create even solutions to solve problems (while making money). Today it is lazy and lacking in innovation and all they do is do silly things like kochoKocho for innovation. Short term thinking... The time they would have scaled and run away with spin-offs and as a real innovator with collaborations with local innovators and start-up all they did was lead you on, steal your IP and quash you (local entreprise). Obviously not having been the originators of the ideas, they couldn't bring to market fruition. A lot of lazy bums there.
It is a shame really, all that money they make, they can innovate a lot (literally afford to make mistakes until they get it).
I was interviewed for head of engineering in 2017 and almost threw up in their face. Some HR woman kept saying am too young to be head of eng :o I declined the offer. But what you note from the brief encounter is the boxing of innovation or engineering as "software" or "data science" - wanting to know a to z of labwork which of course is not possible by definition. They have a mental block that hardware or devices can only be created abroad. Sfc needs to create PLATFORMS - to leverage the global engineering pool - same way they have done with the distribution side - they need as many engineers as they have mpesa or airtime agents. They should have a solid platform - cloud, devices, OS, SDKs, app store, etc. Complete with Developer Conferences or Open Days. Like FB or Google or whoever - and firmly own the base - which can be spirited away anytime. Sitting ducks.
Good you did... you would have just wasted away there. I figure you are thriving out there in Palo Alto. I always say that it isn't worth it to lose many brilliant minds like you to (a) dead end job at SFC when we could be out there creating ground breaking stuff. A very politicised environment too.. a lot of vested interests and folk protecting their turfs/jobs with a freaking buck-passing culture. I would say everyone wants to protect his/her overpaid job/s; especially for the senior chaps there. So they do no innovation there lest you don't get it right the first round (there goes your job!). All they do is to wait for you get through their doors with ideas and proceed to skim as much as possible from you.
Their current cloud infrastructure platform was a pitch deck from a team that i know which they copied complete with the go-to-market strategy. They haven't done any further growth around it from the original idea. Was a huge fight to get them to release their MPESA platform to API's and overall interoperability. It was always their stranglehold on the market and they didn't want to let go that dominance.
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The world is a village and already we see Google Loon, FB and SpaceX going cable-free internet. Satellite will kill the old school telco network of masts and heavy machines on generator all over. Net will beam for dirt cheap and with nothing - apart from a SIM Card :D - Sfc will go 10B to zero. The roaming and such telco nonsense is dying soon - as telco merge with internet - like VOIP and SMS has already done.
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Their current cloud infrastructure platform was a pitch deck from a team that i know which they copied complete with the go-to-market strategy. They haven't done any further growth around it from the original idea. Was a huge fight to get them to release their MPESA platform to API's and overall interoperability. It was always their stranglehold on the market and they didn't want to let go that dominance.
They are too incompetent to compete with AWS or Azure. I think it was a mistake to hire Bob - a PR guy to run a tech company. It's like how Oracle squandered it's enterprise software dominance with cloud. Now they are squirming and throwing tantrums as AWS and Azure sweep all the deals in cloud. They lost the Pentagon Jedi tender recently and it was comical - suing the GoUS. Old Ellison is loosing it - but he lost long ago as cloud then the Hadoops, MongoDBs, Cassandras and Auroras rolled out - as he snoozed in his private yacht.
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The world is a village and already we see Google Loon, FB and SpaceX going cable-free internet. Satellite will kill the old school telco network of masts and heavy machines on generator all over. Net will beam for dirt cheap and with nothing - apart from a SIM Card :D - Sfc will go 10B to zero. The roaming and such telco nonsense is dying soon - as telco merge with internet - like VOIP and SMS has already done.
Absolutely... i was amused with Pundit saying SFC is a telco. That is so yesterday...any one of these operators who see themselves as simply a pure-play telco is a seating duck; ready to be eaten for lunch. Needless to say, SFC with Mpesa is now more of a Financial Services (arguably the biggest Bank in Kenya by sheer turnover). With the re-birth of MVNO/MVNE's the business of merely providing voice or data services will have to be complemented by other businesses/services and platforms to survive. Need I say, Content is King, AI/Robotics, AR/VR and others are the new frontiers the likes of AT&T, Verizon, T-Mobile and Sprint are now battling in...
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Their current cloud infrastructure platform was a pitch deck from a team that i know which they copied complete with the go-to-market strategy. They haven't done any further growth around it from the original idea. Was a huge fight to get them to release their MPESA platform to API's and overall interoperability. It was always their stranglehold on the market and they didn't want to let go that dominance.
They are too incompetent to compete with AWS or Azure. I think it was a mistake to hire Bob - a PR guy to run a tech company. It's like how Oracle squandered it's enterprise software dominance with cloud. Now they are squirming and throwing tantrums as AWS and Azure sweep all the deals in cloud. They lost the Pentagon Jedi tender recently and it was comical - suing the GoUS. Old Ellison is loosing it - but he lost long ago as cloud then the Hadoops, MongoDBs, Cassandras and Auroras rolled out - as he snoozed in his private yacht.
Bob has done nothing except simply ride the wave. SFC was at a trajectory when he took over, he didn't need to do nothing. AWS has been a huge game-changer. Bezos seized the moment and ran away with it! AZURE was slow off the blocks but is now getting it going now. Oracle and Larry Ellis snoozed on the job and are now mostly whining. I first encountered Hadoop about 9 years ago and was very impressed with it. EMC was then one of the biggest early champions of Hadoop then others caught on. Big Data Datawarehousing/Business Intelligence seemed like greek then, now this is the real deal.... so i would add to my earlier point, Blockchain and Big Data is the new era.
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Absolutely... i was amused with Pundit saying SFC is a telco. That is so yesterday...any one of these operators who see themselves as simply a pure-play telco is a seating duck; ready to be eaten for lunch. Needless to say, SFC with Mpesa is now more of a Financial Services (arguably the biggest Bank in Kenya by sheer turnover). With the re-birth of MVNO/MVNE's the business of merely providing voice or data services will have to be complemented by other businesses/services and platforms to survive. Need I say, Content is King, AI/Robotics, AR/VR and others are the new frontiers the likes of AT&T, Verizon, T-Mobile and Sprint are now battling in...
If you're a Kenyan bank - simply invest BIG in tech - buy shares in Pesalink, poach tech big shots to digitize, open a Lab, etc. The point is - don't fret if you miss anything - noone has any monopoly of anything except just a lead. Equity went Equitel not just for mobile money - but mobile internet. They have their own platform - MVNO - and they can launch anything without anyone's greenlight. Eazzy Bank app is better than Mpesa app - last I checked - Equity will beat Sfc & KCB in time. Already they have integrated Paypal, Western Union, I think even Bitcoin. Dr Mwangi is smart - he has a very autonomous structure - MDs - lots of global talent. Check their top managers page - then the careers page - you can see the gap with likes of Sfc.
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Absolutely... i was amused with Pundit saying SFC is a telco. That is so yesterday...any one of these operators who see themselves as simply a pure-play telco is a seating duck; ready to be eaten for lunch. Needless to say, SFC with Mpesa is now more of a Financial Services (arguably the biggest Bank in Kenya by sheer turnover). With the re-birth of MVNO/MVNE's the business of merely providing voice or data services will have to be complemented by other businesses/services and platforms to survive. Need I say, Content is King, AI/Robotics, AR/VR and others are the new frontiers the likes of AT&T, Verizon, T-Mobile and Sprint are now battling in...
If you're a Kenyan bank - simply invest BIG in tech - buy shares in Pesalink, poach tech big shots to digitize, open a Lab, etc. The point is - don't fret if you miss anything - noone has any monopoly of anything except just a lead. Equity went Equitel not just for mobile money - but mobile internet. They have their own platform - MVNO - and they can launch anything without anyone's greenlight. Eazzy Bank app is better than Mpesa app - last I checked - Equity will beat Sfc & KCB in time. Already they have integrated Paypal, Western Union, I think even Bitcoin. Dr Mwangi is smart - he has a very autonomous structure - MDs - lots of global talent. Check their top managers page - then the careers page - you can see the gap with likes of Sfc.
Right on the money....!
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Bob has done nothing except simply ride the wave. SFC was at a trajectory when he took over, he didn't need to do nothing. AWS has been a huge game-changer. Bezos seized the moment and ran away with it! AZURE was slow off the blocks but is now getting it going now. Oracle and Larry Ellis snoozed on the job and are now mostly whining. I first encountered Hadoop about 9 years ago and was very impressed with it. EMC was then one of the biggest early champions of Hadoop then others caught on. Big Data Datawarehousing/Business Intelligence seemed like greek then, now this is the real deal.... so i would add to my earlier point, Blockchain and Big Data is the new era.
I think there is some hope with Alpha - the Sfc Lab - let's see who replaces Bob. I would simply buy a Github or such geek equivalent in Africa. No need to start from scratch - where others have mastered for years. Sfc is salvageable but the window is closing fast. Talent is what is sorely lacking at Sfc.
Hadoop launched 2011 - I know cause I tested the Beta at Sony as an intern. Oracle should ignore cloud - too late - focus on the future. Microsoft lost mobile but managed to catch up on cloud by looking ahead - Nadella is cloud guy. Apple droppes the ball by going for logistics guy Cook - they needed an innovator. Oracle needs fresh blood from AI world as the old Larry takes a back seat.
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Most kenyan companies don't have any global strategy - the best they can think about is East Africa and some now Africa. Safcom are in comfort zone with their dominance of kenya market.
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Most kenyan companies don't have any global strategy - the best they can think about is East Africa and some now Africa. Safcom are in comfort zone with their dominance of kenya market.
Yup - but an easy fix just hire a CEO with global profile - they got the $$$ for that. It's easy to expand past M-PESA and spin subs like say Alphabet - span into Google, Waymo, X, Jigsaw - the original Google is now like 20 $B companies. A proper visionary CEO at Safcom - with all the billions and freehand - can pick up the Viusasas, iHubs, etc - into a big ecosystem of tech - with Sfc as the group holding brand. Some areas like enterprise AI - despite losing out on cloud - none of the big techs IBMs or Microsoft know enough to implement. AI is purely vertical - DEEP learning on specific proprietary data - and will remain so for a long time. It took 2-3 decades for ERP, BI, etc - to be fully horizontal - that's why all the local Oracle & SAP or Microsoft partners minted $$ for years. It was impossible to plug-&-play ERPs and such - until cloud and SaaS took over. AI will take a decade to mature into horizontal or cloud - IBM has tried AIaaS with Watson - and flopped big-time. Sfc with local presence and brand can run away with that space. But you find they cannot even make their own AI work - ZURI chatbot - the dumb thing coughs SQL errors if you type jibberish. :D
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Of course i don't get the idea behind "chatbot" or "voicebot" - it's like a person who can only interact via email. A servicebot should be full-circle - chat, video, voice, bla bla.
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I get it but you're talking shareholders having a appetite for risk - and vodafone is already covered in the global front - and kenya gov is not interested. Until shareholders change - nothing management will do except try ideas in the kenya market.
I think Equity is going to be first kenya real MNC and of course SportPesa is trailblazing. Actually Mandu Chandaria already did that - but the guy is so humble - you won't know he ran a global conglomerate with his brothers.
Most kenyan companies don't have any global strategy - the best they can think about is East Africa and some now Africa. Safcom are in comfort zone with their dominance of kenya market.
Yup - but an easy fix just hire a CEO with global profile - they got the $$$ for that. It's easy to expand past M-PESA and spin subs like say Alphabet - span into Google, Waymo, X, Jigsaw - the original Google is now like 20 $B companies. A proper visionary CEO at Safcom - with all the billions and freehand - can pick up the Viusasas, iHubs, etc - into a big ecosystem of tech - with Sfc as the group holding brand. Some areas like enterprise AI - despite losing out on cloud - none of the big techs IBMs or Microsoft know enough to implement. AI is purely vertical - DEEP learning on specific proprietary data - and will remain so for a long time. It took 2-3 decades for ERP, BI, etc - to be fully horizontal - that's why all the local Oracle & SAP or Microsoft partners minted $$ for years. It was impossible to plug-&-play ERPs and such - until cloud and SaaS took over. AI will take a decade to mature into horizontal or cloud - IBM has tried AIaaS with Watson - and flopped big-time. Sfc with local presence and brand can run away with that space. But you find they cannot even make their own AI work - ZURI chatbot - the dumb thing coughs SQL errors if you type jibberish. :D
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How much is Chandaria Inc worth in $B - that says everything. The man is not even a billionaire last I checked.
I get it but you're talking shareholders having a appetite for risk - and vodafone is already covered in the global front - and kenya gov is not interested. Until shareholders change - nothing management will do except try ideas in the kenya market.
I think Equity is going to be first kenya real MNC and of course SportPesa is trailblazing. Actually Mandu Chandaria already did that - but the guy is so humble - you won't know he ran a global conglomerate with his brothers.
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Chandaria are big - his steel company operates in more than 30 africa countries and many in Asia. Chandaria are very humble. They are all over - also in IT.
Their company UST Global - is alone valued at over 1b dollars.
https://www.forbes.com/sites/mfonobongnsehe/2017/07/07/carlyle-group-offers-200-million-for-minority-stake-in-kenyan-owned-company/#5ad556124af4
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Chandaria are big - his steel company operates in more than 30 africa countries and many in Asia. Chandaria are very humble. They are all over - also in IT.
Their company UST Global - is alone valued at over 1b dollars.
https://www.forbes.com/sites/mfonobongnsehe/2017/07/07/carlyle-group-offers-200-million-for-minority-stake-in-kenyan-owned-company/#5ad556124af4
Yes, the Chandarias are a disciplined serious group. Most of the leadership has now been passed over to the next generation Manu’s nephew (based in Singapore) is a major part of this new leadership. If they were as corruptible and crony leeches like the Dangotes of this world, they would be quite big today. They are quite austere and shun cronyism.
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Pundito,
There is nothing magical about Sportpesa other than exploiting mobile money in a virgin market. Just as MPesa has totally failed to take off elsewhere outside Kenya, SportPesa gets nowhere outside Kenya.
SportPesa paid 80B in two years (2015-2016) according to this article:
https://www.businessdailyafrica.com/news/KRA-demands-tax-on-SportPesa-winners/539546-4987192-gp7lrm/index.html
80B is more than interest expenses of both Equity and KCB. I wonder how much profits they rake but I know they could be busy catching up on these two banks
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Do you think other business are somewhat magical? They have global ambition - and that for me is very strange in kenya. Most kenyans and kenyan companies have a regional mental blocks. Most Americans and their companies - have a global mental outlook - they want to dominate US and the entire world. We need a change of mindset - we need to be more ambitious. But first we need to think Africa - we already cornered Eastern Africa - our companies need to invest in Nigeria, Ghana, Senegal, Ethiopia, Sudan and such countries.
Look at KTDA - easily the largest tea company in the world - and there is no known kenyan tea brand outside our borders. Why is Lipton tea or Sri Lanka Ceylon tea well known.
Pundito,
There is nothing magical about Sportpesa other than exploiting mobile money in a virgin market. Just as MPesa has totally failed to take off elsewhere outside Kenya, SportPesa gets nowhere outside Kenya.
SportPesa paid 80B in two years (2015-2016) according to this article:
https://www.businessdailyafrica.com/news/KRA-demands-tax-on-SportPesa-winners/539546-4987192-gp7lrm/index.html
80B is more than interest expenses of both Equity and KCB. I wonder how much profits they rake but I know they could be busy catching up on these two banks
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Yes, Chandarias and his brothers, have learnt to get stuff done with little fanfare and controversy. I hope they one day list their company in NSE or LSE.
Yes, the Chandarias are a disciplined serious group. Most of the leadership has now been passed over to the next generation Manu’s nephew (based in Singapore) is a major part of this new leadership. If they were as corruptible and crony leeches like the Dangotes of this world, they would be quite big today. They are quite austere and shun cronyism.
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Equity will beat Sfc or KCB not cause of local ownership or lack of vested interests - but the visionary Dr Mwangi. Unless you mean Equity shareholders are more risk-embracing. Vodafone or GoK wouldn't mind Sfc going global - Mpesa has been piloted in TZ, Zambia, Afghanistan all over - with dismal results. I agree it's mental block more than anything.
Vodafone 5% and Vodacom 35% - don't control Sfc - the voting clause was changed to majority. When they swapped with Vodacom. GoK and Kenyans control it now and will pick Collymore successor.
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It comes down to what you noted yourself here severally- the US and China have a structural advantage as monocultures. Once Uber or Microsoft or Alibaba corner the 12 or 20T market - they have the muscle and clout to go global. If you look at EU - no big companies since Siemens or Pfizer - yet their colleges are prolific with patents and science papers. It shows they don't really lack talent but cutting across the dozen or so EU cultures is not easy. Africa has myriad issues - political, poverty, less educated, etc - though culturally we are easily just Ango & Franco - so it easier to cut across than say EU. It's why I think without the one-off outlier Dr Mwangi - just go for MJ expat types. Noone minds expats who deliver.
Do you think other business are somewhat magical? They have global ambition - and that for me is very strange in kenya. Most kenyans and kenyan companies have a regional mental blocks. Most Americans and their companies - have a global mental outlook - they want to dominate US and the entire world. We need a change of mindset - we need to be more ambitious. But first we need to think Africa - we already cornered Eastern Africa - our companies need to invest in Nigeria, Ghana, Senegal, Ethiopia, Sudan and such countries.
Look at KTDA - easily the largest tea company in the world - and there is no known kenyan tea brand outside our borders. Why is Lipton tea or Sri Lanka Ceylon tea well known.
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mobile money in tz is nearly as good as kenya
Equity will beat Sfc or KCB not cause of local ownership or lack of vested interests - but the visionary Dr Mwangi. Unless you mean Equity shareholders are more risk-embracing. Vodafone or GoK wouldn't mind Sfc going global - Mpesa has been piloted in TZ, Zambia, Afghanistan all over - with dismal results. I agree it's mental block more than anything.
Vodafone 5% and Vodacom 35% - don't control Sfc - the voting clause was changed to majority. When they swapped with Vodacom. GoK and Kenyans control it now and will pick Collymore successor.
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Do you think other business are somewhat magical? They have global ambition - and that for me is very strange in kenya. Most kenyans and kenyan companies have a regional mental blocks. Most Americans and their companies - have a global mental outlook - they want to dominate US and the entire world. We need a change of mindset - we need to be more ambitious. But first we need to think Africa - we already cornered Eastern Africa - our companies need to invest in Nigeria, Ghana, Senegal, Ethiopia, Sudan and such countries.
Look at KTDA - easily the largest tea company in the world - and there is no known kenyan tea brand outside our borders. Why is Lipton tea or Sri Lanka Ceylon tea well known.
Pundito,
There is nothing magical about Sportpesa other than exploiting mobile money in a virgin market. Just as MPesa has totally failed to take off elsewhere outside Kenya, SportPesa gets nowhere outside Kenya.
SportPesa paid 80B in two years (2015-2016) according to this article:
https://www.businessdailyafrica.com/news/KRA-demands-tax-on-SportPesa-winners/539546-4987192-gp7lrm/index.html
80B is more than interest expenses of both Equity and KCB. I wonder how much profits they rake but I know they could be busy catching up on these two banks
I’m telling you Sportpesa will NEVER grow outside Kenya