Safaricom is by far the biggest carrier in the country. The telco does not only draw its success from the fact that it has the widest network coverage countrywide, but it also boasts one of the best technologies in the mobile phone industry – M-PESA.
With M-PESA services, the tech giant is able to make huge amounts of revenue each year thanks to the similarly huge number of subscribers in the country, something that has resulted in the push from other telcos such as Airtel Kenya demanding that the carrier be officially declared the dominant player in the industry by the Communications Authority of Kenya.
While Safaricom might not boast the most affordable calling and data plans out there, its stable network ensures that more people keep on using it even when in the remotest parts of the country. Not so long ago, I was in my village down in county 038 and not surprising at all, I could enjoy 3G data services – and sometimes 4G LTE – on my Safaricom line yet having 2G or even EDGE connectivity on my Airtel line was a disaster. This just shows you how the former’s network connectivity is deep compared to the rest, including the old guard Telkom Kenya.
Now, onto the main point. You’ve probably heard of Lipa Later. If you haven’t, here’s a brief description. Lipa Later is a Kenyan startup that is focused on bringing citizens of this great country a new way of acquiring their most desired electronic stuff, more so, smartphones. The tough economic times in the country have meant that many are only able to afford a phone that is priced at Ksh 20,000 and below, but with Lipa Later, you have the chance to own any of these phones priced at close to Ksh 100,000 without the need of breaking the bank.
As we all know, the best phones such as Samsung Galaxy S8, iPhone 7 Plus, HTC U11, OnePlus 5 and many others fall into the latter category, which happens to be beyond many people’s reach. But with Lipa Later, as the name suggests, you are being given a chance to acquire the smartphone of your dream and pay for it later or rather pay for it in installments that can be distributed over a period of 12 months or so.
This is a great way of giving low and middle-class Kenyans the chance to own a smartphone of their dream. The startup, as you’d expect, asks for a few details in order to get you into the program and among them are your employer’s details. This is needed to ascertain that you are indeed able to make these monthly installments once you get paid.
In developed countries like the U.S. and the UK, carriers have a cute way of holding onto customers. One of these ways is by tying them to contracts that can span over a period of two or more years. Here, the likes of Verizon, T-Mobile and AT&T offer customers the chance to get a smartphone of their choice on a 24-month contract, for instance.
Rather than pay for a device in full, which is also an option, these carriers allow their customers to pay for the phone in installments that are distributed over 24 months or 30 months in other cases. For example, Verizon Wireless, the largest carrier in the U.S., is currently selling the latest Samsung Galaxy S8 for a price of $756. You have the option to pay this amount in full or get a 24-month contract with $30.50 monthly installments and $0 down payment. Since the phone is locked to the carrier, it essentially means that you will be a Verizon Wireless customer for the entire period of the contract, which is a huge plus for them.
When a newer version of the phone comes in, say Samsung Galaxy Note 8 or Galaxy S9 (2018), the carrier takes this deal to the next level by allowing current customers to upgrade to the newer phone for a small fee. All you need is to bring in your current phone and get the newer one based on the prevailing rates, which further ties you to the carrier’s network for a prolonged period. However, your old phone needs to be in a great working condition as per the carrier’s inspection body.
This is a win-win situation for both players. Where you get the device of your choice for a fee that doesn’t pinch your pockets, the carrier also benefits from the guarantee that you will be using their services over a period of two or more years. For this reason, you’ll hardly come across a dual-SIM smartphone in these markets for obvious reasons.
This is essentially what Lipa Later is doing here in Kenya, only that the startup is not a carrier, which means that it does this for a direct profit. As a result, you might not enjoy the prices you end up paying for a device like Samsung Galaxy S8 after the full installments.
Safaricom has the ability to make this kind of thing the best way of keeping its customers, especially now that carriers such as Airtel Kenya and Telkom are coming in with tempting calling and data plans. The tech giant already does an almost similar thing with M-PESA via M-Shwari, where qualified customers can borrow a certain amount of money and repay it within 30 days.
What the carrier needs is to simply transfer this kind of thing to its smartphone business by allowing qualified customers to get phones of their choice and pay for them in installments. If it’s possible to borrow, say, Ksh 40,000 via M-Shwari and repay it within 30 days, why not give you a Samsung Galaxy S8 worth Ksh 85,000 and allow you to pay for it in 24-month installments of Ksh 3,542 each?
This kind of move will ensure that Safaricom ties you to its services, which is a plus for the carrier. Also, customers will not have to feel the pinch of having to part with a one-time fee of Ksh 85,000 to get a new Samsung Galaxy S8 or iPhone 7 for that matter, which should end up in a win-win situation for both parties.
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