Effect of Mobile Money Transfer on Corporate Business Strategy in Telecommunication Industry in Kenya: A Case of Safaricom Limited

Abstract

The purpose of this study was to examine the effect of mobile money transfer on corporate business strategy in the Telecommunication industry in Kenya with particular reference to Safaricom Limited. The study sought to answer the following research questions: how is mobile money transfer driving customer usage of other services and generation of new revenue streams; how is it strengthening market competiveness; and how is it performing as a platform for service/product innovation and alliances influencing corporate business strategy telecommunication industry in Kenya. The study used explanatory research because the study was an attempt to lay the groundwork that would lead to future studies on the subject. The target population was drawn from Safaricom Limited and consisted of 7 directors, 10 management staff and 57 operational staff. The study used stratified random sampling procedure because the target population was heterogeneous. A sample size of 44 respondents was obtained. The primary data for the study was collected using the questionnaire and analyzed using descriptive and regression analysis with the aid of Statistical Package for Social Sciences (SPSS 21.0).The results of the study are presented using tables and graphs. The study findings established that the company has strategically utilised its mobile money platform to increase the usage of its other products and service thereby generating revenues via end-user transaction fees and from partner services such as banking and government services while saving on operating cost and keeping the revenue generated by promoting their services using mobile money. The study results also established that mobile money transfer has enhanced the company competitive advantage due to its innovative products and solutions which enable the company to easily transform its money-transfer platform into integrated service thus enhancing its market competitiveness. The study findings further revealed that the company has used mobile money to secure strategic alliances with financial institutions, other corporate bodies, both local and global agent network, retail businesses and technology firms for money transfers and payment services who now use mobile money. The study recommended that the mobile operators need to broaden their reach to a new segment of customers by offering new non-telco services in order to open up opportunities to cross-sell telecom services; to enhance the ease in which customers can utilise the money transfer platform as and when required, upgrading the existing value chain and to create and enhance partnerships with international money transfer companies as well as with local companies so as to create a valuable proposition for customers.