Kenyan telecoms operator targets relationship between conversations and transactions
Safaricom, Kenya’s dominant telecoms operator, is transforming its Mpesa Mobile Money platform into a social network that will integrate payments and conversations. Bonga, which means chat in Swahili, will aim to “augment the social aspects that exist within the Mpesa network”, according to Kamal Bhattacharya, Safaricom’s chief innovation officer. “We think there’s an intrinsic relationship between conversations and transactions, and that fundamental principle is what we wanted to build a platform around,” he said. Bonga is the first product of Safaricom’s Alpha innovation incubator that was created last year. It is part of the company’s strategy to move towards becoming a more platform-based business. In the last year it has launched Masoko, an e-commerce platform, and is rapidly expanding its internet fibre operations. Safaricom is also exploring how to monetise the massive amounts of customer data it has accumulated from its telecom and mobile money operations. The three main ways the 23.4m Mpesa users — some 80 per cent of the adult Kenyan population — will be able to use Bonga are user-to-user, user-to-business and fundraising within social groups.
“We looked at how people are engaging through Mpesa and then designed the tool to make life easier,” Mr Bhattacharya said. Deepak Dave, a Nairobi-based financial analyst said Bonga was a natural progression for Safaricom. “It will embed Mpesa even deeper in the fabric of Kenyan society and make it a core pillar of the economy,” he said. Bonga will include end-to-end encryption and, mindful of the data scandal that has engulfed Facebook this year, Mr Bhattacharya stressed that no data would be retained. “We’re not seeing what the text messages say, we’re not storing any messages,” he said. “The conversations will just disappear.” However, in a country with no data privacy protection laws, Mr Dave said there would probably be concerns among some users. Safaricom, in which the Kenyan government and South Africa’s Vodacom each own 35 per cent, enjoys 69 per cent of the Kenyan market in terms of mobile subscriptions, according to the latest data from the Communications Authority of Kenya, the regulator. However, Mpesa accounts for 80 per cent of mobile money transactions by value.
Safaricom’s diversifying business model was highlighted by its results for the first half of the financial year, announced in November. Outgoing voice and SMS revenue accounted for less than 50 per cent of its Ks109.7bn ($1.05bn) service revenue for the first time as earnings from Mpesa and mobile data accelerated. It is due to announce its full-year results next week. Mr Bhattacharya said Bonga was currently in internal testing and would be rolled out to customers “in the next few months”.