Safaricom Set Back a Possible KES 40 Million Revenue Loss in Morning Network Outage

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Safaricom House
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Safaricom on Monday morning confirmed an outage that lasted nearly two hours affecting the core services in their network. The outage affects the mobile network operators 27.7 million mobile subscribers who do more than just call and text on the carrier’s network.
Safaricom has gone ahead to give a statement both on social media and in a new update to the media as follows.

POSITION STATEMENT

24th APRIL 2017

NETWORK OUTAGE- PROGRESS UPDATE

We wish to notify the public that starting from 9:30 am today, we experienced a system outage affecting a number of core services in our network. This outage affected Voice, Data, SMS, M-PESA and Enterprise services.

We have identified the root cause of the outage and are working to resolve this in the shortest time possible. In the meantime, Voice, Data, SMS, M-PESA and Enterprise services will be available intermittently until the issue is fully resolved.

We will continue to update customers on the progress to restore services. We apologize for any inconvenience caused.

Bob Collymore

Chief Executive Officer

The outage which affected voice, SMs, data, Mpesa and Enterprise Services means a major part of Kenya’s economy was put on hold. But at this point it’s tough to estimate the impact to the economy and the consumers, especially considering that there is also the country’s security system depending on the same services that were down.

There is never a guarantee that systems will be 100% up, that’s why we have 99 percent up-time promise from service providers with several decimal points after 99, the more they are the more the guarantee. Never 100 percent.

What we shall dwell on is the financial impact to the carrier’s coffers.

Voice, data and Mpesa contribute 99 percent of Safaricom revenues, and this right here means that the network outage was a major hit at Safaricom’s revenues, before the impact on individual customers. There is most definitely a crisis meeting somewhere on 7th floor. Safaricom projects Kshs. 200 billion revenue this financial year, the telco made Kshs 98 billion in the half year ending November 2016.  When the 200b is divided by 365 days and further down to 24 hours then that’s roughly 23 million an hour. Making it 46 million for the two hours outage, now that they report to have identified root cause and have services back up ‘intermittently’.

We can’t be as conclusive since a 2 hour outage won’t necessarily mean that people won’t wait out the two hours and still make the transactions they wanted to, but at the end of the day, that 46 million wasn’t made during the two hours. If there is a chance of recovery after coming back up, it doesn’t have guarantees on customer patience. They may consider other options available to them, like cash and cards in case of Mpesa payments, or other mobile carriers in case of voice and SMS.

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