Kenya: Risks to Safaricom Outstrip Mere Business - We Should Be Concerned

By John Walubengo

 Last week Safaricom, the largest mobile service provider in East and Central Africa, suffered a serious disruption to its services.

My guess about how Safaricom's exclusive success story might present a huge risk to the Kenyan economy came to pass.

No doubt Safaricom, the mother of the legendary mobile money service M-Pesa, has brought accolades to Kenya, both here and abroad and we hope it continues to do so.

However, for more than three hours last week, Safaricom services sneezed and the Kenyan socio-economic fabric caught a cold and underwent serious distress.

For each of those hours, the voice signal from Safaricom was affected, with over 27 million or 71 per cent of Kenyan mobile voice subscribers discovering that they could not make or receive calls.

Additionally, 21 million or 67 per cent of Kenyan mobile money subscribers could not transact over their favourite M-Pesa platform.

And this is just the baseline impact, because behind every voice or M-Pesa transaction, there is probably a series of three to five subsequent economic or social activities waiting to happen.

STARK REALITY

M-Pesa does 15,000 transactions per second. Yes, per second, meaning 900,000 transactions per minute. For each minute that M-Pesa was down, there was close to a million transactions that never happened.

Worse still were the downstream, ripple effect of three or more million social or economic activities that were put on hold.

Indeed, telecommunication systems are man-made and are therefore bound to fail at one point or another. This is granted and not in dispute; what is, however, not granted is the time it took to recover and restore these critical services.

More than three hours for restoring critical services is just not acceptable, particularly for a company of Safaricom's stature. The regulator understands this and has promised to penalise the mobile operator but one is tempted to say too little, too late.

Safaricom has been the "green elephant" in the room for the last 10 years we have been celebrating its successful products. This blog has repeatedly explored the risks and benefits posed by a whole economy relying so much on the success or otherwise of one company.

Often we have narrowed the discussions down to whether Safaricom is a dominant player, whether it is abusing its dominance or whether its competitors are simply sleeping on the job while seeking favours from the regulator in order to slow down Safaricom.

But with the recent breakdown of Safaricom services, the dominance debate pales in comparison with the stark reality that the Kenyan economy can easily grind to a halt - unless there are viable and effective alternative means for critical services.

In technical terms, Safaricom's runaway success within the mobile communication market presents a single point of failure for the Kenyan economy.

ABSORBED AND INTEGRATED

This issue is even more pertinent considering that the electoral agency will require a technology partner to provide results transmission services during the upcoming general election.

Safaricom, by virtue of its wider geographic footprint across the country, is likely to be a front-runner in clinching the contract to provide transmission capacity for results transmission.

What happens to the results transmission in the unlikely event that whatever struck Safaricom last week comes back to haunt them on August 8, 2017?

It may help eliminate speculation if Safaricom made the effort to explain exactly what caused the failure and what steps are now in place to ensure this does not recur.

One may argue that technical failures are to be kept secret in order to avoid inviting more similar attacks, but on the contrary, sharing failures and solutions reflects the confidence companies have in their countermeasures.

Either way, the green elephant in the room continues to sit pretty as more and more of the Kenyan economy gets intricately absorbed and integrated into its expanding ecosystem.

On one hand, we have to celebrate its hard-working, innovative culture that has placed it on this successfully trajectory. However, we must equally be wary of the single point of failure dynamics that come with such exclusive success.

The Safaricom question has moved beyond the regulatory scope of competition, dominance or sanctions. It is now about risk management and the business continuity for the enterprise called the Republic of Kenya.

Over to you, the National Security Council.

Mr Walubengo is a lecturer at the Multimedia University of Kenya, Faculty of Computing and IT.

SOURCE:DAILYNATION