One of the biggest challenges with a feature phone is there are limited uses possible in terms of data. Besides the voice and SMS service, the only major services are USSD services. There are also a few apps that are specially designed for feature phones.

Both WhatsApp and Facebook have these, but their data consumption is extremely low and the user experience wanting.

This is the challenge that Safaricom and Google are partnering together to solve by enabling people who use feature phones to acquire smartphones in Kenya.

Implementation

The initiative seeks to empower one million Kenyans to acquire a 4G enabled smartphone and thus help increase data consumption for Safaricom and empower the phone user to do much more than is possible on a feature phone.

At a 13% annual interest rate, the financing is very affordable compared to many other sources of finance that are available in Kenya. The payment plan is to pay a deposit of KShs 1000 and thereafter a daily payment of Kshs 20 for one year. The amount could be higher if one goes for a more expensive smartphone.

For one to use the smartphone, they will need to make the daily payment, otherwise, the smartphone will be locked. This is similar to other Pay as you Go models employed in selling solar equipment such as M-Kopa Solar.

Affordability and creditworthiness

This mode of payment where a person will pay Kshs 20 per day appeals to many people who may find it hard to pay Kshs 6000 at a go. In many rural and informal settlements, people may have the money but may not have it all at once. This is one reason why the kadogo economy thrives in Kenya (although the negative impact is that the poor pay more for goods than the rich).

The other factor that makes it possible is that Safaricom has tonnes of data on consumer habits and creditworthiness, thanks to data from M-PESA and airtime consumption patterns. This makes it easy to know who has both the ability and the discipline to pay for the smartphone. The project is also being done in partnership with Google, which simply means that the reward for them is more data as people transition from feature phones to smartphones.

Win-Win situation

77% of the major towns in Kenya are covered with 4G networks, but only 17% of the devices use the 4G network. The overall smartphone penetration is at 45%, which means that the project has a great potential to increase smartphone penetration and also increase the consumption of the installed 4G capacity in Kenya.

It will also be a motivating factor for Safaricom to roll out the 4G network in more areas as consumption increases. Currently, only 57% of the Kenyan population has access to the 4G network, and the more people get 4G devices, the more telcos will continue to expand this coverage.

Share this via: