Safaricom 2023 Sustainable Business Report

12 OUR STAKEHOLDERS KPI SUMMARY OUR MATERIAL TOPICS OUR BUSINESS SAFARICOM SUSTAINABLE BUSINESS REPORT 2023 INVESTING IN GROWTH Due to the economic shocks, customer disposable income decreased, leading to a higher demand for better value and improved experiences in our products and services. To address this, we launched an ambitious efficiency plan, focusing on price reductions and harmonization across key categories. We conducted a comprehensive pricing review at the start of the fiscal year, resulting in approximately 30% reduction in mobile data rates and 15% in Voice rates. These reductions were achieved through a combination of above-the-line and personalized offerings. Additionally, we made significant reductions in affordable credit “Fuliza” and paybill charges during the same period. These achievements were possible through prudent cost management, allowing us to provide substantial value to our customers. We are committed to strategic investments in new growth areas like in IoT and ICT, proactively addressing potential risks and emerging challenges to continually create value for our shareholders. We understand that private sector-driven growth plays a pivotal role in achieving long-term economic sustainability and improving living standards. Consequently, we continue to invest in sectors that foster our country’s economic sustainability. Notably, a significant 78% of our suppliers are locally owned Kenyan organizations, representing 63% of our procurement spend in the reviewed year, showcasing our dedication to supporting local businesses and contributing to the country’s economic prosperity. DELIVERING MORE VALUE TO OUR STAKEHOLDERS The economic shocks of FY23 meant that our customers had constrained levels of disposable income. Accordingly, they sought more value and enhanced experience in our products and services. We responded by delivering more value to our customers through tailored offerings and significantly reducing our charges for M-PESA and mobile data. On the latter, we reduced the cost of data by 25% per MB which led to over 30% of mobile data customers consuming over 1GB data monthly. This means the price has reduced by up to 75% per MB over the last three years. In addition, over 70% of our voice customers are now on personalised pricing such as Stori ibambe. We are investing heavily in the Internet of Things (IoT) and Information and Communication Technology (ICT) while remaining ahead of potential risks and emerging issues to ensure we consistently deliver value to our shareholders. We recognise that private sector-led growth is critical to economic sustainability and a steady increase in household living standards over time. Accordingly, we continue to invest in growth areas that contribute towards the country’s economic sustainability. For example, 78% of our suppliers are Kenyan- owned organisations, accounting for 63% of our procurement spend in the year under review. CONTINUING TO INVEST IN OUR NETWORK We continue to increase our capex spend year on year as part of our strategic intent to enhance quality, coverage and overall experience. Currently, 97% of our coverage is 2G/3G/4G. A total of 2.3 million 4G devices were added to our network in FY23. We rolled out 205 active 5G sites to 23 of the 47 counties and plan to roll out more in the coming year. The 5G network offers our customers higher speeds, lower latency and increased bandwidth compared to 4G. Our IoT use case continued to offer business and company owners the opportunity to realise the efficiencies created by technology. Over 1.2M IoT connections are in asset management, utilities and telematics. We have now rolled out over 14 000 kilometres of fibre across all 47 counties, with 75% of our sites on fibre. In addition, our network has the capacity to transact 2 600 M-PESA transactions per second. “By continuing to invest in our network infrastructure, we are broadening our product range and leveraging emerging technologies.”