Safaricom PLC (SCOM) Earnings Call Transcript

Greetings, and karibu sana. Thank you for joining us for an inaugural Safaricom Investor Day. My name is [ Zuri ], Safaricom's official assistant, and I will be a co-moderator for today's session. As we begin, I'd like to recognize the presence of the investor community, who have joined us here today. both virtually and physically. I would like to recognize the presence of our regulators, the Capital Markets Authority represented by [ Lucy Kimani ] and [ Wendy Biot ]. Hi, Lucy. Hi, Wendy. The Nairobi Security Exchange represented by Betta Kombe. Hello, Betta. I would also like to recognize the presence of the Board of Safaricom as well as the executive management team, most of who you will hear from and be able to interact with across the day. Before we begin, for the sake of virtual audience, I'd like to outline our housekeeping. Use the chat functionality to share feedback and any comments as we go along in keeping with our promise of diversity and inclusion, a live transcript will be enabled for anyone with hearing difficulties. You can be able to click this in the short transcript tab in your Zoom application. Should you require any support as always, the team and I are on hand to keep you connected with Zoom. You can reach us through chat. For those online as well as those in the room, we have a special digital link available for you to post your questions today. This will be done via online interaction platform, Slido. That can be accessed via www.slido.com, use the code 1786248. Please use this to share any questions that you have. Before I hand you over to our official moderator for today, our CFO, Dilip. I just wanted to comment how much I love Mr. [Maddy's] suit. [Maddy] from HSBC, looking amazing in that suite. Over to you, Dilip.

Good morning, thank you, Zuri. That was great. As you can see, she is a smart assistant. She even recognized [Maddy's] suit. Wasn't that amazing? On a more serious note, what we have brought to life today is our virtual assistant. We call Zuri, who is an artificial intelligence and machine learning power bot, that serves our customers on a day-to-day basis. Zuri offers and interacts with millions of customers on a day-to-day basis. Through our big data and analytics, we are able to know our customer needs much better and therefore, serve them on their day-to-day life to make their life simpler. These topics will be part of our conversation today. Our vision is to transform into a purpose led technology company by 2025. As we evolve our business, we felt it would be important to unpack how we aim to bring our strategy to life across the next few years and showcase how we are driving purpose-led growth, which is what our theme for today. Just to remind you, this is not an earnings call. This is not a discussion on our earnings or numbers, just to make sure that we all understand what you are doing today. But rather a discussion an understanding on how we are executing our long-term strategy. Anyway, if you have any questions on numbers, as you know, our Investor Relations team which I believe are super friendly will always be happy and supportive. We will open the presentation today with a macro overview and strategy update from our Chief Executive Officer, Peter Ndegwa, followed by a presentation on how we are embedding purpose at the core of our business by Karen Basiye, our Director of Sustainable Business and Social Impact. Following Karen will be a presentation on financial services by our Interim Chief Financial Services Officer, Boniface Mungania before we take a short break. The second part of the morning will be on our enterprise business, and that will be presented by our Chief Enterprise Business Officer; Cynthia Kropac rounded up by a presentation from Morten Bangsgaard, our Chief Technology and Information Officer. In the afternoon, we have presentation from Anwar Soussa, who is here today with us, who is the Chief Executive Officer for Safaricom Ethiopia PLC. Before each break, there will be experiential presentations from each of the business units, you would have seen those booths behind you. And it will be done by the business units, and they will guide you for all those presentations. After the break, we'll hold a 15-minute session to address if you have any questions from the presentations held. Before we close the hybrid section, we shall have a longer question-and-answer sessions with all presenters. We encourage especially those joining virtually to maximize use of the session as that will be the last activity for you today. For those physically present, you will, of course, have an opportunity to have a group speed network interactions with our leadership team. And that will be in the back of the room, which rounds up the formal agenda for the day. Zuri?

Yes, Dilip.

Have I missed anything?

Cocktails.

Yes. The cocktail yes, as we round up the day, we'll serve a cocktail in the evening, which everyone physically present, of course, physically present will have an opportunity, and all of you are invited to enjoy. Without further ado, it is now my pleasure to introduce our Chief Executive Officer, Peter Ndegwa, to kick us off. Karibu, Peter. As he comes up, we'll watch this short video. [Presentation]

All right. Good morning. Good morning, everyone. People in the room, good morning. I know those online may not -- we may not see those online, but you're all looking very lovely today. I was actually noticing that Zuri did not recognize me, which is a good thing from a self preservation perspective. But I will have to speak to Zuri later and find out why she does not recognize the CEO. But good morning, and welcome, everyone, and thank you to our CFO, Dilip. I was actually saying that I almost wore the same color of shirt as yourself. It's good I changed. But also, I want to recognize Caroline, who is a co-moderator for today. So I want to start by saying welcome and good morning to the Safaricom Inaugural Investor Day. I know that we normally would have an investor engagement at both full year but also half year, primarily to talk about the results of our business and also take questions from the investors. So we are really delighted that we are having this first meeting as a hybrid event, having investors join us face to face and experience a very different feel of our business. It is good, as Dilip has said, that I don't have to answer questions about whether we are going to treat our numbers for the full year or not. That is for another day. But we are really looking forward to today's day, and I want to welcome those online, in particular, and I hope that you'll be able to follow this today as if you are in the room. And the reason why we, as Dilip explained, we have the theme of driving purpose-led growth as we've been talking about this over the years, and I hope over the past 2 years. And I hope that today, we can start to bring it to life in many ways, both through the presentation by various presenters but also some of the machine that you'll see from the team in a moment later this morning. So let me start by recognizing the presence of Board Directors of Safaricom. And we have a fully comprised board with a new chair, and some of our board members are attending online or actually face-to-face. Good to see you, I see that. And also, we have the leadership team, a group of experienced individuals. You are so used to seeing myself and Dilip. So today, hopefully, you can see a number of Edco members presenting today, I'm actually taking you through in detail of some of the strategies that we are continuing to execute. We also have a number of other leaders who are leading very significant areas of the business, including a new area we've formed to focus on the agenda that the government wants to drive. We are elevating the process of how we think about our brand, especially as we expand our business and go into the region. And of course, customer is always the king. And also, I'm very delighted to be welcoming the team from Ethiopia, who are here with us physically today, and you'll be hearing from Anwar later this morning or rather later this afternoon. And Ethiopia is a very important business. And when you think about Ethiopia, we are looking forward to setting up our business that will be the size of Safaricom today in 10 to 12 years. So it is going to be a significant business for us in the future, and it's good to see it start to go live. So I'm looking forward to hearing a lot from the people who you don't normally see on a regular basis. So to start off and to set the scene, I wanted to start by something which is very important to us at Safaricom. We talk about spirit and also people are the most important asset in terms of delivering on our strategy. Safaricom has been known as a very successful business in the region, and you see some of the progress that we are making. But a lot of that is rooted in the kind of spirit that we have. We call it Safaricom spirit, which is about 4 big areas. The first is purpose, which is the core of what we are as a company. We are known for more than just commercial objectives and what we do every day. Purpose has always been central to what we have done. And it's about bringing to life what makes a difference to our society, ensuring that we combine technology and innovation to solve societal challenges. And there is no better example than what we have been able to do on financial inclusion through M-PESA, and Boniface will be talking about that. The second is customer obsession. We are, of course, a commercial business and we will not be existing if our customers are not happy. So in terms of understanding customer needs, in terms of bringing those needs to life, in terms of using technology to make user join us and experience right. And we talk about customer obsession because it's about the spirit of it and what everyone does every day. And then -- so it's about earning customer loyalty and ensuring that we are always very connected to what our customers want. And then the third one is collaboration, which is about doing it together. So it's about not having silos in the business, and you'll see some of the progress that we are making, especially in launching Agile as a way of working. So it's about bringing the organization together to work together, to co-create solutions that make a difference both to society through thinking through the sense of purpose, but also to solve customer challenges. So collaboration is a very important element of our spirit. And then finally, it's one element that Safaricom had been known for, which is innovation, which is about building the future and it's about keeping renewing our business and renewing the things that we do and the business we are. So this is the core of how our business comes alive. And you should see this coming through in a lot of what you'll hear today. And just briefly on customer obsession. One of the things that -- the way we've thought about customers and earning customer loyalty. It's not just about the customer touch points, whether those are shops or care center or indeed the way our commercial people go about their business every day. It's about thinking from a 360 degrees starting with the type of offers that we provide to our customers on the GSM side to the way we think about really being intuitive and secure in the way that we deliver financial services business or even in the new area such as the home side, in terms of fiber because the fiber business is very different or the fixed business is very different from the mobile business because it involves actually visiting a customer and dealing with issues that face customers every day. Or indeed, in terms of thinking about the connectivity we provide every day through our network, both on the network, but also the experience that we provide through IT side and Morten will be talking about that. All indeed, on the touch points that we interact with customers through the omnichannel excellence on the shop -- in our shops, in our care center. Zuri is an example of how we interact with customers and then wrapped up in being the culture that we bring every day with our employees, with our partners, who are dealers and agents and the whole community that serves our customers. So this is the way we think about our customers and our customer obsession, and we are bringing this to life to ensure that we combine, as I have said, innovation and technology to solve societal or customer challenges. Then in speaking about people and the areas that we have focused on and wrapping it up all in the spirit. You can see that on the left-hand side, we have Agile operating model, which we have changed our way of working, so that we allow ourselves to operate it together or we bring collaboration together in the way we engage our customers, in the way we assess their needs. And then in the way that we empower our colleagues to build their craft, to build their skill sets so that we can be the best supporters of Kenyan communities. And also, in the end, are able to deliver great value to our shareholders. So agile has started off well. We have doubled the number of digital talent. We have about 34 -- just over 34 Agile teams and about 1/3 of our business is operating Agile. As a result of that, we've also started to build tech capability, as you see in the middle, what we call future-ready talent and started to skill our people both on the technology side but also the fintech side. In particular, as you know, we've been recruiting graduates every year. This year, we have recruited 80 graduates who are tech -- who have tech skills because we want to make sure that we inject tech talent into our ecosystem toward the big data and analytics, and you'll see some of that later on this morning. And then also, we have joined other operators in the industry to come up with an industry talent program where we are training talent of the future. We also are thinking about how we ensure that our talent is diverse and inclusive. As you can see, we have a target of 40% female in senior management, which is we call FF plus and we are almost there. We believe by the -- in this calendar year 2023, we should be able to hit that 40% in terms of senior management. And also, we are also focusing -- the other element we focus from an inclusion perspective is people living with disabilities. And then on the right-hand side, you can see, on culture, we normally would assess how we are doing. We do something we call [indiscernible], which is the [ Swahili ] word for say, I will give you our views or give you a feedback. And as you can see, on purpose our employees are very connected to purpose in the 90s, 94% and all the other elements, customer obsession, collaboration and innovation is mid- to high 70s. And we believe that with -- this is through the changes that we are implementing. And in another couple of years, we should be in the 80s, which is very highest cost in terms of connection to spirit. And you can see that our engagement is 79%, just below 80%. We've been voted the best place to be. And of course, from a health and safety perspective, we call our program, Zero Harm. As we come out of COVID, the hybrid working is becoming an important way of operating, and we are starting to ensure that our employees have a balance in terms of the way they operate. Let me speak briefly about our purpose. And I'll do this through a video which is supposed to be ... [Presentation]

Why are you not clapping? I'm not supposed to ask you to clap for me, but I think that's a fantastic video. I always have played that video a few times, and I always get amazed by what Safaricom is to this country, to our customers, to our society. And you saw some of the elements of our spirit coming alive, whether that is purpose, customers, innovation. There was a lot of innovation there, but also the collaboration elements, not just collaboration within our ecosystem in terms of internally, but also collaboration with partners that allow us to bring solutions that help us deliver solutions that help us solve customer issues and also societal challenges. And this brings it all in one page, which is we are all about transforming lives in terms of our purpose. Our vision, as Dilip said, is to be a purpose-led technology company by 2025. Our brand promise is being simple, transparent and honest. This is about ensuring that our customers get what they want. And then it's all the foundation of it is our culture, which is the spirit of Safaricom, as you've seen in those 4 areas. And some of the elements you've seen in the video will also come alive when Karen, who is a Director of Sustainability comes to talk about in detail or give you a lot more information about what we are doing, both on the commercial side in being real to society, but also what our foundations are doing. And on the right-hand side, you can see some of the key elements that I mentioned in that video about the impact of our business and how we operate 1 million jobs supported by ecosystem. And you can see it, for example, through the M-PESA agents that we have, which are 250,000. The impact of M-PESA from a social perspective and also the fact that we create more than 10x in terms of profit to the value to society. So a significant impact and significant contribution to the society because our belief is if the society does well, Safaricom will be a sustainable business. And that's one of the reasons why we are connected to purpose. So let me now switch on to business overview. And I'll start with this slide, which in one page shows just the scale of our business across -- of course, the largest business in the region, the leading operator in Kenya. In terms of scale, we have 2/3 share of the market. You see scale in terms of customer numbers, whether that is M-PESA in the 30s in terms of 30-day active but also total customers, but also the scale of our network both from a technology perspective, we are now at 97% coverage on 4G and have launched 5G but also the distribution footprint that we have both on the financial services side, on the agent side, more than 0.25 million. I always say it's about 200 people for 1 agent. So it's almost at arm's length. And it is the scale and the reach of our network is much better than any of consumer goods -- the most distributed consumer goods in this market. You can see that M-PESA agents is more than 0.5 million. And we've seen that tripled since COVID. And on the right-hand side, you can see that we have the use of technology tools by our merchants -- sorry, I should have said the 500,000 is merchants and the use of the business app by our marshals, but also agents. And you'll be seeing it later with the team at the back. So a significant scale. We have a Net Promoter Score of 64%, and I'll talk about that. The big area that we need to continue to drive its affordability, and we have made huge progress. And then, of course, the ubiquity of our network, which Morten will be speaking about. So we have clearly, a ubiquitous brand a household name that has scale and reach that makes impact every day to consumers and both on the connectivity side but also on the financial services side. And we will use this scale as we transform to be a purpose-led technology company because it gives us the opportunity to really pivot into ability to become a tech business. Many of you have seen this, so I won't go through it, but you can see that we have started to shift the focus from the kind of traditional mature business, which is voice into the mobile data, which still has a lot of headroom. Fixed is becoming important, but also, of course, financial services, and you'll see it later. This is a slide that I really love because it shows just the way we have grown our business. As you can see on the bottom of that slide, usage of both voice and also data, voice traffic, whether that's minutes of use or data in terms of gigabytes or terabytes. You can see that data has more than tripled in the past 4 years and voice has increased by 60%. So we continue to invest to give customers the ability to use our ecosystem. For those online, you probably know you probably will hear airplanes flying because we are on the flight path. So on voice, we have grown traffic by 60% in a mature business. So it shows that we are still continuing to engage customers in a way that they are able to continue to use this franchise. And then on data, we have more than tripled in the past few years. On the top, you can see that we have reduced the rate. We have continued to make our voice and data more affordable and actually also reduce the premium that we had in our business. 5 years ago, data price was about $5 for a gig. It's now about $1. So effectively, we are much more affordable from a data access perspective and also on voice. Now the next stage is how do we ensure that we have handsets that allow customers to use data. And that's why the Lipa Mdogo Mdogo, the device financing is very important because it allows us to then ensure that everyone has access to the Internet. Today, we still have about a 1/3 -- only 1/3 of the population have 4G handset. So the next 2 to 3 years will be important for us to really transform the ability of customers to access the mobile data by ensuring that they have a device in their hand. On the right-hand side, you can see the significant reductions that we have made on our financial services business and the Boniface will be talking to this in a few minutes, both in terms of the credit side on the Fuliza side by 50%, but also in terms of tariff reduction on the P2P, which is person to person transfers, the pay bill, which is the merchant and also the wallet bank and bank to wallet. Many investors were asking us, what will you do when you go back to charging. We have reduced those charges by a significant amount. So we've used the increase in traffic that we have seen since COVID to ensure that the affordability of this is at a much better level. So as we see growth in revenue in kind of single mid-single digit, we are growing the volume side very significant. The usage side, very significant and also growing penetration very significantly. But now that we have course corrected on data we should see that then leveling off in terms of the future pricing of data. Let me talk about briefly on the market context. So of course, it's a tough environment at the moment across the world in Africa, but also in Kenya in itself. So we have here a number of measures that or a number of parameters that we look at. On the macro side, we see a slowing GDP. Inflation is at unprecedented high level across the world whether that is on food, energy, but also in Kenya, in particular or the Horn of Africa drought. Currency is a challenge. And of course, the Ukraine Russia conflict. Those are already known by investors. We continue to monitor the impact of those issues. However, the big upside, though, is we've had a political transition that has worked very well, peaceful elections, very, very smooth political transition that was enabled through the working of the constitutional offices, whether that's the Electoral Commission or the Supreme Court. So we are satisfied that from a business perspective, that has drawn a line compared to past elections. From a regulatory perspective, we continue to monitor a number of elements, including the mobile termination rates, which we saw a reduction and also because of where the economy is, there are fiscal pressures from a tax perspective. We continue to watch the whole debate around a significant market player status. But one of the big arguments we always make is we are large because we invest. We are large because we are more innovative and we are large because we make an impact to the society. And of course, we have had from January a return to charging for bank to wallet and wallet to bank, which I've already explained. On the right-hand side, we talk about some of the risks that we manage on an ongoing basis, primarily technology in nature, cyber, but also anti-money laundering element and also data privacy that we stay [ with it ]. And we are managing this in a proactive way. We have a significant cyber capability. In fact, we are seen as the regional leader in this area, and we'll continue to do that in the future. From a customer perspective, the biggest issue that customers face today, given the economic environment is seeking more value and that's where you've seen we've continued to course -- to correct to ensure that we deliver more affordability for our customers. There are some very clear positives, especially from the government perspective, government has said the new government has made ICT as a major enabler of its future agenda. And we are already involved, for example, in Hustler Fund, we are one of the lead, ICT or other provider of choice from a digital enabler of choice in ensuring that Hustler Fund was launched. It was launched within a very short period of time within 8 weeks. It has more than 18 million customers who have already been onboarded on to the platform. We believe we have a significant SME opportunity and Cynthia will talk about that. And we are following the law as far as data protection is concerned. Given all that context, how are we playing our role in the market and how are we ensuring that our business is strong. We believe that it starts with ensuring that we are delivering the needs of our customers in a way that is affordable and ensuring that we do that even as we course correct on price, we continue to deliver very solid growth in the future. We will use productivity and the cash flows that we get from a lot of the work that we've done on productivity to fund growth whether that is Ethiopia or new growth areas. We continue to mitigate some of the risks that we face today through growing our business but also driving productivity. And we have been able to show resilience of our business from a profitability perspective through accelerating growth and delivering balanced growth but also through the focus on productivity. You've seen this before, so I won't go into the detail of it. It shows our strategy in one page, both in terms of continuing to strengthen the core, but accelerate new growth areas. So on this final slide for me, it shows the areas that we are focusing on as a company to ensure that although we continue to protect our existing business, from a voice perspective, but also some of the core traditional business on the financial services side, such as P2P, but pivot into the new growth areas, both expanding our financial services business in lending and wealth and Boniface will talk about some of the products we are launching this year. I've talked about the Hustler Fund, which we supported government to launch. There is upcoming news on wealth, which on our wealth product, which Boniface will speak about. Scaling new growth areas, Ethiopia is a big pivot area, which Anwar and the team will speak about this afternoon. We believe that there's a lot of work that the government wants to do to digitize government to automate collection of revenue, and transform government through an ICT lens. So that's a big area that we are focused on and between Cynthia and Boniface will be speaking about. Mobile data and creating access to the Internet for consumers is going to be a big platform for us to play into the future. So device penetration will be a critical enabler of our mobile data revenue profile. But it's not just to ensure that we deliver mobile data. It becomes the foundation for delivering automation and digitization of the country because if the government wants to digitize its services, it does that through ensuring that we have smartphone penetration. The right smartphone penetration in the market. I've talked about people and the operating model that we've set up going Agile, ensuring that we are doing things together. And we are ensuring that we can go to market at speed. We will not have been able to support the government in the Hustler Fund if we do not have an Agile -- an Agile organization. We were able to mobilize in a very short period of time, put the right talent and skill set together and be able to walk, co-create with the other industry players on a product that in 2 months has 18 million customers, which is fantastic. And we continue to really ramp up the focus on our talent and capability, what we call building the craft of our people. And then, of course, we are building that by enhancing the engine of how our business operates through driving big data and analytics and invest in that. And you'll see our team at the back, Charlotte and the team talking to us about Big Data and also talking to us about customer value management to ensure that we use data to give customers better propositions to improve user journeys and to ensure that we are able to co-create the products of the future. So I hope that gives you a summary of where our business is, some of the challenges that we are managing, how we are keeping our business resilient, but also how, more importantly, we are building the platform for creating a purpose-led technology company of the future. Thank you very much.

Wow, that was powerful. Wasn't it? But the clap. Thank you. Do clap. I think it motivates the speakers to do even better in the future, okay? Thank you. Thank you, Peter. I think it was very, very powerful. You have articulated our vision of transforming lives and our vision of becoming a purpose-led technology company by 2025. And also you've articulated very well the road map how we're going there? And what are the enablers and your focus and your emphasis and your passion around the culture and the spirit of Safaricom came alive. I think that's very important. Everything else follows, and that's what we believe in. And your focus on how we are getting into the new phase, which we're calling the Phase 3 for our growth areas. So we had 2 fantastic decades in Safaricom when we celebrate our 20 years. We are getting into the next phase of growth. That's what you've articulated by saying the focus is on our new growth areas. So thank you, Peter. As we mentioned before, as you're focusing on the presentation, please think about your questions. And please do this by Slido link. I hope you have that. Actually, you can see that on your screen. Go to www.slido.com, use the code 1786248. Put your name and institution you represent as you close your question. I would now like to invite Steve Kiptinness tines, our Chief Corporate Affairs Officer; and Karen Basiye, our Director for Sustainable Business and Social Impact, to give their presentation. Karibu, Steve and Karen.

Good morning, ladies and gentlemen. It's a pleasure for us as the management team to be here to speak to you about what we are doing at Safaricom. And my role here is to sort of just set the stage for what Karen will speak to, which is about embedding purpose. Peter touched on certain highlights around why we are about purpose as a business. Our purpose journey didn't start yesterday or last year, it actually started in 2000, where how the company approached what it did was about purpose. As it was said in the slides before, purposes about connecting people to people, people to opportunities and people to knowledge. And that's what Safaricom is really about. If you could go to the next slide, please. What we have done as Safaricom is to make sure that before we go for those profits, and we do know that we're here to talk about how is your investment protected? How are we doing as a business? But it's not that the investment is not important, the profits are not important. We believe at Safaricom that what is really important is purpose because when you focus on your purpose and what is our purpose to transform lives. And when you focus on transforming the lives of the people that you're serving, the profits will come through. So we go after purpose first, and this is sort of our purpose slide around how we transform lives. We intend to be a purpose-led technology company, embedding purpose in the core of what we do. And this is not having it in one department that does social impact. This is about all business teams, all commercial teams embedding how they think around innovation. Peter has said in the past we don't innovate. We don't believe innovation is for the sake of innovating. Innovating is for specifically to answer certain pressing social needs. When you meet a social need, you are transforming the lives of Kenyans. And when you transform the lives of Kenyans, the profits will ultimately follow. The pillars that we have shared value plan and responsible business and our people and the world around us speak to the areas where our purpose is important. I'll highlight on the fact that Safaricom is about not focusing on being a linear economy company, but a circular economy company. And the circular economy speaks to when you produce you reuse, you recycle, you reinvest, reproduce to make sure that there's absolutely no waste, so there's minimal waste. In fact, a fundamental principle of a circular economy is that there's absolutely no waste. Now we know that it's probably not going to happen. But we are intend on making sure that how we run our business, the impact it leaves in our environment, and shows that we are operating in a circular economy model to make sure that we are reducing our carbon credits. We are moving away from diesel gensets to solar power. We're making sure that what we put into our environment is positive. And to that end, we intend to be carbon neutral by 2050. We have a program where we are planting trees and my colleague, Karen will speak to that. to ensure that we are offsetting the carbon that we're putting into the environment through the tree planting. The shared value, we want to make sure that we are sharing what we are investing with the communities that we're living in. And so really our promise to our society, to our consumers to the Kenyan society as large is that we have a social contract where we are going to make a difference in your lives. We are not going to focus on pure profits. Like I said, if we focus on our communities, if we focus on making sure purposes at the core of how our teams innovate, how we sell, how we pitch our services, how we pitch our products, inevitably the profits are going to come in. The core areas of transformation that the business focuses on -- are in education, the MSMEs, youth and women and in the platform that we create. And in education, we have a program called the citizens of the future. because if you don't -- any corporate citizen, focus on education as a crucial platform or crucial theme, countries will not transform. Education is at the core of creating that knowledge base. That will give a country the leg up to the next level. In terms of MSMEs, in our country, SMEs, MSMEs constitute about 98% of the businesses that are run in our economy. Our MSMEs are contributing approximately 3% and increasing fast towards the GDP. They provide about 30% of the total employment in our country. You can see why for us MSMEs are a very crucial area of transformation. And so we partner with MSMEs to ensure that we are latching on to what do they need to grow. What is the next area of transformation. What's the next big thing? And I dare say that the Industrial Revolution 4.0, which is where we're at, is really what can lead us to that. It's about 3D printing. It's about Internet of Things. It's what we can do in terms of modular design to enhance what our SMEs or MSMEs are getting into. Youth and women is a very strong area of transformation for Safaricom. Peter has shared our focus in terms of in the business, we make sure that our partners, our suppliers, the MSMEs that we're engaging with if they are MSMEs that have youth, that have women at the core of their leadership behind those businesses, those are the ones we want to focus on and give greater opportunities, too, because if we transform our youth, if we transform our women, then our society has done much more better, and we are meeting our vision of becoming a transformative company through purpose. And finally, the platform that Safaricom is innovating around those, that's where it really happens. That's where we really bring the communities, bring people, bring businesses together. And so for Safaricom, these 4 areas of transformation are big focus areas. And finally, I want to reiterate that our principles remain around purpose before profit. As our investors, you will get your profits after we have focused on purpose in the community. We are building capabilities and making sure that in those capabilities we are building. We have infused 9 SDGs into how we transform. And those 9 SDGs are crucial for us because as a business, we believe that there's a much larger role that we can play in ensuring that we are keeping ourselves our communities and our country accountable. And now I want to invite my colleague, Karen, who looks much better than I am than I do to come and speak to and add more color around transformation. Welcome, Karen.

Thank you, Steve. Thank you so much, Steve, for setting the context. And thank you, Peter, for always being our #1 [indiscernible]. Robert F. Kennedy once said, the purpose of life is to contribute in some way to making things much better. This is a question we ask ourselves at Safaricom all the time. How can we make the lives of our customers better? What about the communities in which we operate in. And in response to this, we have our 4 purpose pillars. And in each purpose pillar, you will see how the pillar carries the purpose of Safaricom. So the first purpose pillar is creating shared value. How do we create shared value? We create shared value by innovating and developing products and services that touch the needs of the society. So we respond to societal needs in how we innovate in Safaricom, yes. We create shared value by looking at creating digital societies. How do you create digital societies as a business. You create products such as Lipa Mdogo Mdogo. Lipa Mdogo Mdogo will enable those who can't afford to be part of the digital society to join us in our digital transformation journey. And in Peter's speech, he talked about connecting people to people, connecting people to knowledge, connecting people to opportunities as well as connecting people to the world. And when you create these digital societies, then we can showcase -- sorry, you'll get to showcase what we are doing in the digital space from my other colleagues. If you remember when we had COVID-19 pandemic, if it wasn't for connectivity, what were the children who are studying have done, education, health, agriculture, we innovated around these things. For instance, in education, you've heard of Shupavu. This is an education revision tool. And some of the students who sat for their exams from the northern part of Kenya claimed that it is this product that help them revise us to be able to pass those exams. And I think the ladies scored over 400 marks. So indeed, the innovations we've done in health do support our communities. In creating shared value, the spirit is to leave no one behind. There are millions of people to date who are unable to take advantage of the benefits of digitization. So what are we doing as a purpose-led technology company. We are broadening the focus for inclusion and accelerating programs that will benefit our society at large. Under this pillar, if you look at Peter's video, you might have seen Masoko, DigiFarm, M-TIBA, these are part and parcel of the products that create shared value. Looking at Pillar 2, which is our planet. As a business, we are committed to managing our environmental impact. We do not see environmental impact or the environment or planet, as a separate entity from the business. We have integrated our environmental needs. And we know that the greatest impact we can have as a business is to go to net zero by 2050, but also the carbonize society. And by carbonizing society, we are looking at how artificial intelligence, IoT smart metering can support the government's digital agenda as well as making the life of the normal Kenyan easy by doing digitization around the planet. This does not mean we'll stop doing what we've been doing. We have met and set the net zero by 2050 target. We have done our science-based targets. We know the trajectory we are on. And we know that by 2030 internally, 2050, if we don't put certain measures in place, we might not get there. And so what have we done as a business? We have taken a step back and said, we need to have an offset program in place, therefore, growing the 5 million trees. We are not just growing the trees. The trees do increase the forest cover for the Kenya government where they have a target. The previous target was 12%, and we are proud to say we did contribute to Kenya's 12% -- from 7% to 12%. And now the target is to hit 30%. So we've managed to grow almost 1.3 million trees, and we are looking into growing more of these trees as we move forward. The fourth pillar is operating responsibly. As a business, we know that integrity is critical to securing our long-term success as a company and as a business. it is important as our commitment to our social contract. So what are we doing here? We are looking at ethics and integrity in-house and out of Safaricom. We believe in operating in an ethical and upright way, and we want to be a company full of integrity. We look at anti-bribery and corruption, both in within our value system and within our ecosystem. Human rights and digital rights, a new emerging area, and we believe that as a business, we can contribute to the advancement of fundamental rights around the digital rights of the people. Data protection, a big key issue where our customers trust us and they trust us with their data. Therefore, trust is at the heart of everything we do in Safaricom. The fourth pillar is our people and the world around us. This is the heart of Safaricom. Our employees and the communities in which we operate in cannot thrive. We cannot thrive as a business when these communities are not thriving along with us. So as a business, we believe we are building a future fit talent and agile organization, and we are also building an inclusive and diverse ecosystem within the employee base as well as the communities in which we operate in. Moving on to our environmental commitment. Allow me to take a deep dive into the 2 pillars. So I'll take a deep dive into environment and a deep dive into the community. So as a business, we are committed to transforming the lives of our customers and stakeholders in an environmentally sound manner as well as continuous improvement. This is a commitment we've made. We also recognize that our consideration for environment are not separate from the business. I had already stated this. And one of the things we do is reporting in an open and transparent manner. If you look at our environmental achievements, we talk about the good, the bad and the ugly, what we have done. I have -- as I've just said, we intend to plan -- grow 5 million trees we are at 1.3 million trees. So we have a big runway to go to hit our 5 million mark. When it comes to solar, and you'll see it in the video and Morten and technology team will tell you, we started with an ambition of having 4,000 sites. They're now, delightfully I had -- we had 5,000 sites being connected to solar. So when I look at circular environment. This is now our planet portfolio. I see that indeed, we want to do lowest and restorative systems. We are looking at things with our supply chain from sourcing, so design, sourcing, end-of-life tracking, [tech buck] schemes, so network waste. We are always growing the network. How do we get value back from our network waste. We are looking at things 100% renewable and Kenya is blessed with geo and hydro. So indeed, if we can manage to get on to solar, then we do not need to use fuel systems. So what are we saying? We will optimize, we will electrify and we will decarbonize under the circular economy. When I look at climate change, net zero decarbonizing society, very, very exciting. I look to see what my colleagues in the Enterprise business and in technology will help advance our agenda in decarbonizing society. So smart meters, all those things, fantastic initiatives that the business is working on. And of course, we operate in a regulated environment, and we do comply to the local, regional and international environmental laws, and we do benchmark ourselves at the global level so that we are always a few steps ahead of the regulator. I'll pause here for the environment video. [Presentation]

Thank you very much. The second area of deep dive is the foundations. We have 2 foundations at Safaricom that is a Safaricom Foundation and M-PESA Foundation. The foundations work across 5 critical pillars, education. In education, we are looking at TV and also improving learning spaces as well as digitizing education. And the second area is health. Here, we focus on maternal and neonatal health as well as adolescent health and noncommunicable diseases. The third area is environment, water and livelihoods. This is a critical area tied to our disaster response. Currently, Kenya is facing the worst prolonged drought, I think, in 30 years. And we don't know when the end of the drought will be. As a foundation, we have responded in 2 ways. We were the first corporate to create Pamoja Tuungane in response to supporting our communities that were highly impacted by drought. After this initiative, the Kenyan government saw it fit to appoint our CEO, Peter Ndegwa, to lead private sector across Kenya in supporting and building resilience as well as long-term sustainability. We had to be here again in another 6 to 10 years. So we are working hard using our assets, our knowledge and our partners to ensure that we ring fence these communities. The final area is economic empowerment, and this ties back to the strategy. So our impact in the foundations, 7 million people lives have been touched, over 2,000 partners, and we are in all the 47 counties. So ladies and gentlemen, what gets measured gets managed. We recognize that Safaricom cannot exist without Kenyans and without Kenya as the country. This is our story. This is the story of our brand and our purpose. We are intimately interwoven in the fabric of this country. Perhaps more than any other company in Kenya, we have an intimate understanding often in real time of the true needs of the Kenyan people. Kenyans believe in the ability to find a way to achieve their goals despite the toughest odds? We at Safaricom fully sharing this vision, and I look forward to seeing the vision come to life in Ethiopia as we transform lives. This has been our impact. And most of this has been addressed by other speakers and you'll interact with this. Thank you so much.

Thank you. Thank you so much, Karen. So Karen has spoken about how we are embedding purpose at the core of our business, and she walked us through those 4 pillars. And how we are impacting societies by our contributions, by our efforts to our sustainable business and social impact program. The successful implementation of this will allow us to impact 45 million lives by 2025. As mentioned before, we'd love you to share your questions. Please do this by Slido link. Is there on the screen. Again, go to www.slido.com, use the code 1786248. Once again, repeating, put in your name and the institution you represent as you close your question. Now it's time for me to invite our next presenter Boniface Mungania, our Interim Chief Financial Services Officer, to give his presentation. I know there's a lot of interest around financial services. Bonnie, welcome.

Ladies and gentlemen, good morning. Good morning. Peter said, M-PESA is one of the most successful mobile money products in the world and is the largest fintech in Africa today. We want to walk you through this journey in a simple presentation. here, and then I'll invite you to go back stage, and you're going to go through an experience of [indiscernible] or some of the products that we'll be talking about. But before then, welcome to M-PESA addition. [Presentation]

So when you look at M-PESA, Kenya today ranks third highest in Africa in financial inclusion, only behind [seashores] in South Africa. And M-PESA has been pivotal to this depending on financial inclusion in Kenya. But if you look at the product M-PESA, it is evolving. And today, we can actually break it down in 3 overlapping phases. The first phase was the launch when it was a very simple use case of send money home. It's what, and this is when we set up the infrastructure of agents and getting customers to transact. But the most exciting phase is the one that we are in today and then that your transition to the bad phase, which you call payment digitization A couple of things have happened within this phase. The first one is acceleration of P2P, the original use case of Send Money Home to become the largest payment use case for M-PESA. And what this has done? Because of the simplicity of peer-to-peer, this is what has gone into what you call the informal economy, getting trust and getting small businesses transacting. And as a result, we have penetrated 94% of the other population today with M-PESA. The next thing that we focus on is democratizing business payments. You realize that P2P addresses informal, business payments try to formalize. And 3 things have been worked on during that period. The first thing is just enable our business to collect and bank their money with great success. Then the second thing, which is what we've done the last 3 years is to address a bigger problem than payment collection, which now makes M-PESA transactional account. So we call this a business still today. And then the other thing, we've now evolved it to a universal payment network with interoperability with other mobile money networks, and we continue to interoperable with other payment service providers. Over 900% growth in value of transactions in the last 10 years alone from USD 30 billion in 2013, today, USD 300 billion in annual value flowing through M-PESA. Next is expanding the global reach. 174 corridors are connected to M-PESA. And if you look at the nature of remittances today, they're all terminating to mobile. And so you can comfortably say 90% of volume flows into Kenya are terminating to M-PESA. Next, we went a step fiber, and we built rails or tools that enables technology partners to connect to M-PESA. Today, we have an ecosystem of 61,000 developers and 33,000 integrated applications live on our platform. In fact, I'm trying to quantify, we believe this is one of the best API platforms in the continent today. Further -- and this is a question that has been asked several times, are banks, your competitors? No, we've collaborated with banks, and we have become the distribution platform for digital financial services. During the COVID period alone, 600% growth in value of M-PESA to bank transactions. Further, we've improved our technology significantly. And my colleague, our CTIO, will be highlighting this further. But this financial year, we are on course to achieve a 99.99% availability on M-PESA. And there are other things that you have done, especially around value addition. We introduced micro credit as a value addition to payments. And this is what is powering velocity today. Started with term loans, which are monthly to an overdraft, which now is an embedded credit on the payment journey. The outcome of this is over 64 loans are processed on M-PESA every second. So this is the big story of the payment digitization space, which we're just exiting. And then the exit continue, but our focus really goes to the bad phase. We are now seeing more and more integrated solutions that are embedded to payments. Then we moved to a very exciting phase, which is now what you call the ecosystem play. This is where the M-PESA is going to. What are some things that we are seeing or we want to achieve or we want to power out of the empowerment stage. First of all, it is focused on platforms. What you'll be seeing on stage, for example, is how we are building multi-tenants and credit products and marketplace as opposed to bilateral partnerships. A quick question. A couple of digital lenders were approved by Central Bank few weeks ago. Are they competitors? No. They are going to ride on the rails that you're building because you are becoming a marketplace for such providers. So one of the things that we are very focused on and the bigger transformation of the bad phase will be empowerment, a cash-light society, a digital government powered by M-PESA platforms. The second thing is financial health beyond financial inclusion, and I'll be highlighting shortly how we are focusing on certain dimension on financial inclusion beyond access and use. What you'll be seeing is how we started looking at some of the areas that we believe have opportunity for further digitization. For example, all insurance in Kenya today for cargo imports is done abroad. We are moving it to Kenya. It's already regulated, but there's no enabling technology. You'll be seeing shortly how we're enabling imports or insurance for imports to be paid locally in the marketplace. You'll be seeing how we are addressing barriers to wealth and really focusing on growing savings from the 13% growth that we have today. Then the second thing is what happens to the developer community, not just connecting with M-PESA. We want techpreneurship. We want entrepreneurship that is driven out of innovations they can build out of the M-PESA rails, and you'll be seeing this in a short while. For consumers, they are used to payment. In fact, you are saying these are M-PESA natives. Now we are serving a big generation of M-PESA natives. And our real focus now is how can we power consumer digital lifestyle. And then for businesses, how can we empower them digitize them further and you'll be seeing a showcase of how we are transforming businesses. And then on the global is how can we open more opportunities in the global marketplace. This is how we describe M-PESA today, not a product, but a 3-sided ecosystem with big opportunity in businesses, these are agents and merchants. A real opportunity to get up to 7 million businesses today. The second is a very important partnering the ecosystem with the development, and we'll be showcasing how we're evolving this. And then finally, the consumers where you're saying we want to power their day-to-day lifestyle. And getting more practical. How are you doing this? We've invested in technology and our CTIO, will highlight some of this shortly. But also going further to adopting new technologies like AI, Big Data, we've built an open API in Kenya, and we are building a single point of integration for all M-PESA markets in Africa. And then further, evolving M-PESA into a modern architecture, which is cloud natives and on micro services. And we have created 2 broad interfaces. One is a Super App for consumer, focus on day-to-day lifestyle and open focal creation with the external world. And further, for businesses, you'll be seeing 2 sites emerging from M-PESA. The customer-facing end of the merchant is now what you're calling point of sale and service beyond just payments. And then for the back office of our business, is now what you're evolving to a mobile ERP kind of. You find that the majority of the businesses you are serving today are likely to have smartphone as the fast ICT tools. And we are building on top of that. And then finally, we've talked about the beautiful story of financial inclusion, but the real focus has been on access and use. And so a very important area that you're focusing on now is barriers to financial inclusion. And the first one is cost. Cost is a barrier to use today. The first thing is all the micro transactions below $1 are 0 rated. And this is 30% of all M-PESA transactions. The second thing is we've now started looking at credit. And starting with the overdraft, we've reduced up to 50% on what you call daily access fee, which is about 50% of all the drawdowns on the Fuliza product. And then further, we've recently announced reduction in payment charges by up to 50% average. And then looking at certain areas and we are showcasing this, we have a real opportunity to go micro and get address the issue of informality at the micro SME. We've launched the wallet, which you call Pochi La Biashara. And then further, we've just introduced a wallet for the children between the age of 10 and 17, which we'll be showcasing to you in a few minutes. And so ladies and gentlemen, I want to invite you the backstage so that we can walk through a different type of presentation, experiencing some of the initiatives I've talked about, karibu.

Yes. So if you want to sit here, you can also sit if you want because you can see those on the screen. You have a choice. You have a choice of going there with the team who are presenting and showcasing, but you can also sit here and see in the screen, yes. It just is choice. Thank you.

Thanks. As you walk, we'll start with the first. So we'll be projecting on the big screen. And as many of you -- as you take a stretch and -- as you stretch and take a small break. We can also line up where the booths are. We'll start with the first booth, which is focused on next financial services. And this is really a story of how M-PESA is firing in financial health and addressing barriers to next financial services like wealth.

Thank you. Great. Good morning, everyone. My name is [indiscernible]. I'm joined here with my colleague, David [Canny]. We are from the next financial services team, and we'd like to take you through what we do. I think from what Boniface has explained, as we're moving to these credits aspects, where do we go the platform players. So our role is to accelerate fintech marketplaces. And with this, we're looking out to starting with a number of different services. One is credit marketplaces. That's going to be able to enable our consumers and businesses that are connected through our platforms to be able to lend into these varieties of business. And this is a play that allows different type of products and partnerships. So it's a multibit. We like to walk you through what we call a credit marketplace that allows us to plug in a lot of who are the fintechs, digital lenders that are being approved by central banks and the banks with the different products to be able to lend in our marketplaces. And this is a simple journey of how you're opting into a simple mini app or the marketplace and you get into login with your M-PESA pin. We validate that and we give you a variety of partners that are connected there to be able for you to choose you. You could choose 1 partner, for example, if I choose equity. Then I will say I want to get a loan from equity and we'll follow up that process clearly. And we get to see what it is. You get to see what you can borrow the time lines and the tenure. All this is powered in the back end by a big credit scoring engine with big data analytics that we run within our ecosystem. So this allows you to see what you do. You can request a loan based on the limits you have and the tenure you have chosen. And you request, it's as simple as that, and the loan gets to be disbursed to your M-PESA account for your transactions. The repayment journey is as simple as, again, the same way. What do you do how do you repair the loan simply like that. And this enables us to be able to track and your repayments are done correctly and we keep scoring and giving you the variety of options. So the marketplace enables different players to come into the ecosystem and offer their different products and services for us. I think as we now look for as a marketplace, I think Boniface, has explained, we've done credit side and we're moving to more protection and then investments. So my colleague, David will take you through what we're doing on insurers.

Thank you, and good morning. So as we -- looking at credit, which has done an incredible job of ensuring there's a lot of financial inclusion. We would want to move into financial health. And with that, we've introduced insurance products that help our customers protect their investments and also into wealth management and also assist us in growing or helping them invest in the market. So I'll take you through insurance. So with insurance, of course, we know that [success rate] that is very green. The penetration rate currently is about 3%. We want to sort of disrupt that space and provide -- address some of the pain points that our customers have, including use of access and claims management. And to do that, we've worked closely with the regulators and the market intermediaries to build products that can drive that journey. One of our products that we would want to showcase that will be launching this quarter is marine insurance certificate, issuance of marine insurance. And that covers insurance of cargo from country of origin into Port at Lamu or Mombasa. So the marine space has about -- we import about [ KES 2.7 trillion ] worth of cargo. But out of that, only about [ KES 3.8 billion ] is covered. From that space, we've seen a lot of pilferage in terms of coverage. And working closely with the regulators, that is IRA and KRA. We've come together to provide a technology called product, where we provide the platform for IRA to start now oversighting that space. and also assist the ecosystem, digitalize end-to-end in terms of offering that product. So I'll take you through the demo for our product called [ Coral ], which covers marine insurance, certificate insurance provision. So the first step is that you, as a client, you will access this through M-PESA app. And once you get to opt-in, then one of -- the first thing you will do is you will input your KRA pin. And once you get your KRA pin validated, then it will populate what you call your IDFs. Your IDF is your import declaration form that has the manifest for your cargo and also the value transit into that manifest. With that, we're able to compute the premium payable for that cargo. So you can either do this as a customer or you can do it through your clearing agent. So once you select your IDFs, then you can select -- you can get the details of what you -- your IDF number, what you covered and the value in terms of the premium to be paid. When you select the payments, so you can either decide to pay now or you can select to sell that request to your customer in case you're using this as a clearing agent. So once we pay then you will get your details populated and then goes to M-PESA and then you're able to pay for your certificate. Once that is done, then you're able to access your marine certificate, and this is what now will be populated and sent to the customer for purposes of confirming that your cargo is covered from point of origin. And the other duplicate is sent to KRA for purposes of clearance at the port. So when your cargo arrives at the port already, your cargo is cleared. It's confirmed clear and you're able to exit it. What that helps with is one, the IRA is able to oversight the market better. KRA is able to validate cargo coming in country and able to collect the right taxes.

And what you've seen there is this is the marketplace from day 1. It's not one insurance company, multiple insurance companies will be presenting their various offers when you're clearing your cargo.

Okay. All right. I think the next aspect now comes in is particularly around what we're calling wealth and investment. And we will want to showcase one of our approved product, MALI, which is a money market fund, but this is just a stat. As we said, we are building up platforms to enable different type of investments to be done within 1 ecosystem from money markets to bonds to a lot of what we call ForEx trading. So this is what we're enabling within the ecosystem and bringing in multiple fund managers and equity investors in it. So my colleague David will showcase what the progress is.

So as we get into the wealth space, of course, one of our key objectives of wealth is to inculcate our service culture. Currently, Kenya, we are 13%. We're going to grow that to closer towards Vision 2030 as part to be at 20%. For us to do that, we create products around wealth and wealth management that will allow customers to access digital products easily and also they're able to invest easily or accessing the markets, the stock exchange and also our merchants. They also go to market and also raise capital from our exchanges. So I'll take you through MALI which is our inaugural product. which has already received regulatory approval from CBK and CMA and should be going to market in the next couple of days. So once you access our M-PESA app, you will find MALI as a mini app inside there, and you're able to join in by opting in, once you obtain if you're already an existing customer, you're able to see your investment profile and the portfolio. And you see the value there. For example, you can see my balance at [ KES 483,000 ]. And also, you're able to see what you have in terms of your M-PESA balance. So with that, you can decide to make more investments as easy as tapping onto the invest feature and able now to move into your M-PESA wallet and pull money from M-PESA wallet into MALI. Once the transaction is validated, your investment balance goes up by [KES 10,000] because that's what you are investing [indiscernible]. So you're able to track one, your value on a day to day basis in terms of growth, in terms of interest and also the interest rate that is attributable to your investment on that particularly. So what you'll find is that you have an annualized rate, but it's paid daily in terms of what you accrue for that particularly.

Thank you. So again, this is a marketplace. Behind that is a lot of fund managers who will be joining the platform. We'll do the next demo and then we take one question. Now here is how -- or an initiative that we have that is empowering a financially health young generation.

Good morning. My name is Virginia. I'm product manager, M-PESA Go.

My name is [ Kavera ] , Growht Manager in M-PESA Go.

For this particular demo, I will be [Wanjiku]

And I will be [Mama Wanjiku]

So M-PESA Go is lifestyle platform, we are building for the young generation precisely teens. So think of anyone between the age of 10 to 17 years. In Kenya, we have about 11 million teens between that age. And we have seen parents increasingly giving them access to phones and actually some of them having access to payments. But we need to fix 3 things with M-PESA Go, so that we can raise a financially healthy next generation.

The first objective is to provide financial inclusion for our teens with parental control. So as [Mama Wanjiku], I'm able to view the profile of all my children. Let's have a look at [Wanjiku's] wallet. So from [Wanjiku's] profile, I'm able to view all her transaction history at any time. I am also able to determine what services she has access to by enabling and disabling of the services. I am also able to set what limits set transaction limits whether on a daily, weekly or a monthly basis.

Yes. So from that as a teen, I get a digital wallet with payments. And I am able to see end user, the services that my parent has allowed me to use. For example, if you look at my screen here, I'm able to send pay and buy airtime. And I can pay for my daily needs. For example, I can pay for Uber, [Ivakela] Taxi. I can pay for KFC right from my wallet.

The second objective is to introduce practical financial literacy for our teens.

Yes. As my colleague has mentioned before, our savings rate is at 13% in Kenya of our GDP. That's extremely, extremely low. And that's because we were not instilled the culture of savings at a young age. M-PESA Go wants to -- or seeks to turn around that narrative. And by making or instilling practical money skills and one of the skills that we want to tackle is savings. Want to instill a savings culture right from a young age. So imagine your teen who is 10 starting to learn about savings. We are about to introduce one of the use cases around savings, which is goal-oriented savings. So as a teen from my app, I can save up for any of the cool and nice stuff that teens by, for example, PlayStation or make up for the ladies. And through the app, I can set my savings target and actually track how far I am in my savings journey to buy whatever I need.

The third objective is to create an ecosystem of digital services through partnerships to create value and empower our teens.

That's right. So we want to -- we don't want to just give teens payments platform. We want to go beyond payments. and expose to them services that empower them and add value to their lives. We've built M-PESA Go with the capability to connect and host third-party services, whereby we work with our partners in the market and expose services that are important for their growth. One of those services that we have already connected is a coding program. So we've worked with one of our partners, Kodris Africa as you can see on the screen, an exposed coding program, which has already been approved by the government to be rolled out in schools. And now M-PESA Go users can access it right from their phone. They can enroll from their phone and get access to that content. So it's not just about payments. It's going beyond payments from go to growing them. And finally, as you can see from this app, I think we've made it -- made the UI to match the cool and fun personalities of teens like me.

Thank you. Thank you, [indiscernible]. I'll take one question before we proceed to the next booth. Or we can take the question probably from the next booth. So the next case is how M-PESA is empowering micro, small and medium-sized enterprises.

So good morning, everybody. Good morning, everybody. My name is [ Laura Bayou], I hope can hear me. I'm the booth's manager, [indiscernible] & Financial Services.

My name is [ Maureen Mato ], I'm the Product Manager for business payments.

Yes. So today we're taking you through the business app, which is a digital platform that hosts both our agents and our merchants. However, what we're going to go through today is to take you through the experience of our merchants as they interact with this digital platform. So this platform so far, we've had 280,000 merchants signed up into the platform with about 75% of them actively using the platform. So remember, we've transitioned our merchants from just receiving payments and on the Merchant Till. We've enabled them to be able to do payments out of their Till. So they're able to pay their bills from their Till. They're able to pay their suppliers and as well as pay their staff from the Till. So inflows from the Till and outflows from the Till. So we're transforming this Till also to become what we call the point of sale where our merchants from this digital platform, will be able to generate QR codes for the -- QR code when they're receiving -- for the digital customers who are able to initiate transactions from their QR code. They also be able to send requests to their customers for payments as well as generate receipts right from the point of sale. [ Maureen ]?

Currently, we have services that we are offering the businesses. And we are allowing our merchants to grow their businesses by automating their business processes. We are going to partner with third parties that offer some of these businesses. Tools like HR and payroll, CRM for customer relationship management, accounting for bookkeeping and stocks and inventory for inventory management. I will also partner with businesses that offer insurance services, merchant financing for credit, investments and also government services like licensing.

Yes. And also on top of that, what we're doing for the merchants, we are helping them manage their business better. So through this tool, they will be able to onboard their staff, whether it's the salespeople or it is a restaurant of the waitresses. So the salespeople are able to capture the sales that they collect from the customers that do payments into the Till. So what does it do for this business person, they're able to track the performance of the employees and obviously make decisions in terms of how they're going to pay their employees. And the good thing about this tool, we have an insight section where -- which -- where the merchant is also able to see the trends in terms of inflows and outflows. And also, we also inform them on the seasonality of their business. So what does it do for the merchant, they are able to do better planning. They're also able to plan when to stock up depending on the seasonality and the demand in the market. So what are we saying with this tool? We're telling our merchants and we're helping our merchants digitize their product -- digitize the operations, how? They're also going to be able to make better planning, as I mentioned earlier.

It's going to reduce time -- costs in terms of time. So in terms of reconciliation paper work, they don't need that anymore because they have everything in 1 digital tool. And what are we doing for merchants, we're helping them digitize their operations. Thank you.

Thank you. Thank you very much. As I said earlier, this is ERP on mobile for small businesses. Next, I want just to go through how M-PESA is powering consumer digital lifestyle.

Good morning. My name is Felix Karuma. I'm the product owner of the M-PESA app.

Good morning. My name is Gakenia Gathura, Growth Manager, M-PESA app.

So when we are developing the M-PESA app, we had 3 main goals. Number one, we wanted to have a best-in-class user experience for M-PESA. So one example for this is that it takes 8 steps to complete a transaction on our traditional channels. So that's the SIM Toolkit and USSD. But on the app with feature such as QR code, we have reduced that to 2 steps. You scan and authenticate and you're done. And you have done this across the product line for M-PESA with all our products and services. Number two, we wanted to evolve from the basic of payments to becoming a fully fledged digital lifestyle service provider and in the process also evolving the business model for M-PESA that you'll hear about it a little bit. And third, we also wanted to expose next financial services. And you have seen the first demo, so feature such as MALI, the wealth management, the insurance marketplace, the credit marketplace will all be featured and anchored in M-PESA app. So the app becomes an anchor channel for all our products and services going forward. Since launch, we had 7 million downloads. And I think a critical start is that we have seen an average increase of 16% increase in the average revenue per user once customers come onto the M-PESA app. And also, we have seen a 33% increase in the number of transactions customers perform when they come into the M-PESA app from the SIM toolkit and USSD, which goes to show that's increasing or improving the user experience for our customers and also layering the lifestyle services makes the app more or M-PESA more relevant to our users on day-to-day basis. What you can see on the screen is our next evolution of the M-PESA app. So we still keep the core transactions front and center. However, at the same time, we bring more prominence to the third-party service and mini apps. And here, we have categorized them into the distinct aggregated verticals. So for example, we have education, we have government, we have health care and we'll be adding more over time. So next, I'll invite Gakenia to take you through some of the mini apps and also give you a glimpse of one of the aggregated verticals we're working with.

Thank you. So as is mentioned, we have 32 million active M-PESA customers. Of this number, 52% have access to smartphones. So with this data in mind, we looked at what our customers are paying for. We noted shopping, food, transport, health care and education among the common use cases. So we partnered with third-party providers to give our customers these services. So we're enabling them to access all these services on an amazing platform that is the M-PESA app. So our customers don't have to download several numerous apps to access all these lifestyle services. Partnering with third-party providers enabled 2 things. One, we're able to monetize at a much higher rate. The traditional rate is at 0.6%. The traditional transactional charges whereas our current monetization rate is at 7%. The second thing is that it enables us to empower businesses. We're able to allow them to help them scale. We're able to give them access to a larger customer base through co-created growth strategies. M-PESA app is also utilizing Big Data and using technologies such as AI. So we have a recommended engine that suggests services according to user's profile. So someone is adjusted to the services that they would generally want to use or they generally have interest in. So as was mentioned, one of the common use cases is shopping. So we are creating a retail aggregator shop that enables our customers to be able to shop at the convenience of their phones. All they need to know is the products that they want to buy. They don't have to struggle with looking for the stores and looking for different applications to find the services or the goods that they're looking for. But they can conveniently buy them from this aggregated store, all the deals that are at the home page and they can be able to check out with a single sign-on. So we reduced the number of drop-offs that are normally caused by long forms at the beginning of other applications. And our customers are happy and they're able to access everything from the convenience of the M-PESA app. I welcome any questions.

Thank you very much, team. So as we said earlier, it is not one e-commerce marketplace. It is vertical marketplaces. Aggregation of vertical marketplaces build around the consumer lifestyle. I propose we do the last one, then we can take a few questions. And here is how M-PESA is promoting techpreneurship out of our developer platform.

Hello, everyone. I'm Juliana Rotich. I'm Head of Fintech Solutions.

Good morning. I'm Steven [indiscernible], the Software Developer Engagement lead for M-PESA. So welcome. I'm going to take you through how we are exposing the functionalities of M-PESA through what we call the Daraja APIs. Basically, an API is an acronym for application programming interface. It is an intermediary that allows 2 systems to exchange data. And in our scenario here, the 2 systems would be M-PESA and an application on our website that takes or accepts payments through M-PESA. So through our APIs, I will be able to quickly demonstrate to you how simple we've made it for software developers out there to quickly create an application and test and then ship it to production. So the payment option that they've selected would be obviously M-PESA. And then when we choose the product that we want to go with, we create a profile, which we call an application. After the creation, they are provided with credentials that they would need to be providing so that they are authenticated on our platform securely. Let us choose one of our APIs, M-PESA Express to be able to do our demonstration. So we want to build this customer [facilities] and we'll be able to trigger the transaction from our side. So we would need their phone number. And then also, we would need to notify M-PESA that when that transaction completes, tell us through this link that we provide here. So when we quickly simulate this transaction, the customer would receive USSD push on their phone. And then after they receive that USSD deep push, they would be required to authenticate that they indeed want to make these payments by entering their M-PESA pin. And just like that, M-PESA will be able to notify the application for the software developer that indeed, the transaction has been completed and you receive the amount. And as you can see here, the application would be notified. We've made it very easy. In fact, it takes just about 5 minutes from testing to shipping your application to production. Juliana?

Great. So this is just one example. We have several more APIs on our platform. We also have the open API hub that Boniface mentioned. And what this means is the more integrations we have that means there's more data and transaction value flowing through those APIs. Out of the leading tech companies, for example, in logistics, a company like Sendy; in food distribution, a company like Twiga; in lending, [ DigiSako ], Pezesha, many others that are probably part of your portfolios. Banks many start-ups, international money transfer partners. All of them have something in common. They all connect to us through our APIs. In terms of value, that is about $1.3 billion of transaction value that goes through APIs each year. What you've seen is a lot of innovation from next financial services, SME, Super App -- consumer digital lifestyle Super App. APIs that we have on Daraja, both internal and also the ones that we expose to the external community help us to be faster at innovation at Safaricom and also power innovation by third parties in the larger ecosystem. And in terms of impact to society, anytime a developer is hired either within a bank or a startup, they are paid to do that work to integrate M-PESA into their application. Last but not least, this helps us as a business as M-PESA and Safaricom to be more embedded in society in industries that we are not actively participating in but we are an enabler and a key part of the economy from government processes, government payments to businesses and even to global commerce, we are part and parcel of the ecosystem and of the processes to complete a transaction. We are working towards increasing the number of developers increasing the number of integrations, increasing the number of partners. And like Boniface said, this is in order for us to continue to power the 3-sided ecosystem that M-PESA is becoming. I will be happy to answer any questions.

Thank you very much, Juliana. The case you've just seen could be a young developer who could earn 100,000 shillings by just completing that integration for an FMCG company or retailer. So that's why we're saying we are powering techpreneurship using these rails that connect M-PESA to third parties. Thank you very much. That's the end of our presentation. We will have a few minutes for 1 or 2 questions.

[ Maddy Singh ]from HSBC. I just want to understand, this API system sits with you. But if somebody wants to create an app, does he have to be -- like he has to visit a store or he does -- so how does he -- actually the whole process? Like, let's say, I am a merchant and I need to integrate with M-PESA through this API. So what do I do? Do I have a phone number? Do I have a website to go to? Do I have to go with -- visit a physical store? How does the entire thing work?

Happy to answer that. So as a developer, we have a site called Daraja. You go to daraja.safaricom.co.ke. There, you will find all the documentation about what you would need in order to integrate M-PESA. And then also, we have API security guidelines because we are a regulated entity, not only because we are a regulated entity, but we protect all of the transaction data that is flowing through our systems. So you would log in, you would create an account and then you would be given a sandbox area that would also give you step-by-step instructions on how you would integrate M-PESA into your application. And then it would help you to go live. And we've reduced the amount of time. It used to take about 4 to 7 days because there's a lot of e-mails back and forth, but we have added automations -- and what Steven has just shown is we've reduced that time from 4 days to 5 minutes. So if you're a developer, you can quickly just get coding, put it together, add M-PESA as a checkout option and you're done.

Do we have any other questions? Happy take one more.

So how do all these things integrate? Do they all integrate at one place like all these different kiosks we have been to? Do they all integrate to each other as well? Or they're all functioning separately -- in separate boxes?

Yes. So what we've done is, in the presentation, there is a slide report, which is called a FinTech 2.0 platform. This is like M-PESA where all transactions are running. And then we are building now auxiliary systems around it. So one of them is Daraja, connects to the core and powers this. The other one could be a credit marketplace, connects to the core and then powers that particular site. Then this is apps and channels. They are connecting and then you have now the AI and all the other auxiliary systems. But it is like one fintech platform, which you're seeing now, it's cloud, it's micro services architecture and then it's firing all these ecosystem.

What I'm also trying to understand is that if as an M-PESA customer or Safaricom customer, if I, let's say, signed up for M-PESA Super App, does that automatically also enables me to, let's say, sign up as a M-PESA business customer as well because I might be a businessman? I will have kids, obviously, so that can integrate obviously with the M-PESA Super App. But I mean, do I have to go install different, different apps for all of this? Or can I do all of that in one place within the smartphone?

Yes. So we have 2 broad channels. If you come in as a consumer, you come through the Super App. And now we are working to all Safaricom services in 1 Super App and then third party services in 1 Super App. As a customer all you need is sign up for M-PESA Super App, all consumer services plus connection to all the businesses are here. When it comes to a business, one business up, which you sign up as the owner of the business, and then you see close to 3 versions. The first version is at your point of sale, there is a version that now we are building what you're calling point of sale and service that we can roll out so many other services plus payments. Then in the business office or the back office, we give you this view that shows you how your business is doing. And now we also have the agent side, which they log into the business app, and then they can distribute our services. So you have 2 broad channels: Consumer, Super App, Business Super Up, and we are complementing the Business Super App with a web portal for the larger businesses. Okay. There have been no other questions. We thank you so much for your attention. And I will take the program back to Dilip.

Thank you. Thank you. Thank you so much, Bonnie. But can we have a big round of plus for Bonnie and the team? Please be generous. I think the team has done a fantastic job. We all see in presentation, we've seen slides but seeing something coming live, I think it's incredible. So thank you once again, the team very well done. Now what you have seen Bonnie talking about how we are developing M-PESA for future, how we're investing in M-PESA, which is Africa's largest fintech and of course, a significant presence in Kenya. M-PESA has evolved into 3 sided ecosystem powered by a robust technology platform. So as you can see from Bonnie's presentation, as you have seen Peter's presentation this is one of our major growth engine for future. Ladies and gentlemen, we have now come to the end of the first part of the program. We will take a 30-minute break and resume at 11:15 East Africa time. I repeat, we resume at 11:15 East Africa time. See you soon. As you're preparing for the break, you can also start thinking about the questions that you have. And as you know, you have slido.com and the code that you have remembered, you can post your questions as you're preparing for the break. See you soon. Thank you. So just to -- just for your information, the tea would be served on that ... [Break]

Welcome back. Can you please settle down? So -- we hope you enjoyed the break and now ready to continue today's conversation. So the next 15 minutes, we'll use to answer your questions that you have put it in slido.com. And may I now request Peter, Karen and Boniface to come on stage, please. And our Head of Investor Relations and Financial Planning and Analysis, Caroline Wambugu will assist me with this session. Caroline, what questions do you have for them?

Yes, we've got a number of questions for our presenters. Thank you and let them keep streaming in, about 13 questions have come through, but we've got a 15-minute slot to answer those that are specific to our 3 presenters, and I'll start right away. I'll start with Bonnie. Bonnie, there are 2 questions for you. Let me touch through the first one -- the first one is from Jaynesh of Mazi Asset Management. And Jaynesh is asking on wealth management, can consumers invest in the stock market through M-PESA and are there plans to develop products around -- more products outside of money markets.

Thank you. So MALI, which means well is what [indiscernible] is a platform -- and it's a platform for many fund managers and for products -- multiple products. So what we've done is because we're introducing it first time, we started with a very basic product, which is money market with a real focus on addressing specific barriers that we see in the money market products today, especially area of liquidity, ATC. And what you'll be seeing over time as the AUM growth, more fund managers will be coming on board. So it's not one fund manager. Second to that, you'll be seeing other products. So what you're doing is you're also encouraging the fund managers who are getting on board to bring more innovations and there's a framework to accommodate new products undermining. Then within the public sector, digital transformation, we've committed to government that we will initiate a pillar called digital access for the securities market. We are working with Nairobi Stock Exchange, [ CBSE ] and all the brokers to create digital access, which will be linked to MALI. And we expect this in the -- within -- before the end of first half of FY '24.

Thank you, very much Bonnie for that question. And the second one to you Bonnie as well from Rohit of Citi. Please, could you give more color on the percentage of M-PESA consumers using up versus USD and M-PESA, ARPU growth when a customer shifts to app-based platform from USD, what's the shift from an ARPU growth perspective?

Thanks. So what you're seeing today, look at M-PESA channels in 3 ways. [indiscernible] on the app and API. When you combine app and API, it comes to about 16% of all transactions going through those 2 channels. Some of them is because the API transactions on the app are rather being initiated from the partner applications, STK and USSD. We don't -- we find them rigid and they are basically addressing the non-smartphone market, still the dominant transaction with the balance, which is over 80%. What do we see as a behavior shift when customers are moving to smartphones? So the [indiscernible] initially the KPIs are chasing is downloads. And then now we've gone to monthly usage. About 1.2 million customers are using the app every month. And now we move to a more presentation, which is measuring consumption [indiscernible] services. So you see a customer do all the payment services on the app and then start consuming the services earlier, like buy tickets, buy food, entertainment, TCC. But what you're seeing, when customers shift before and after, 16% growth in ARPU, 34% growth in days of use and 33% growth in average transactions per month.

Thank you very much, Bonnie. And now to you, Karen. There are a lot of insights shared there on the sustainability report. And so there is a question from Lilian Mwikali of Sanlam. And she wants to know if you could please shed more light on the 25% increase in environmental externalities. What do this relate to? And what are the plans going forward?

Thank you for the question. So the externalities on the environment side relate to the growth in our network. So our carbon footprint increased a bit from growth in network and the year under review, the COVID restrictions have been relaxed. So then we started traveling around, so scope 3 emissions also went up. Those 2 are the main drivers. And then globally, the social cost of carbon also increased as we had [indiscernible] and that's why the externalities went up. So the initiatives that we are doing, one, we'll talk about solar. So moving from dependence on diesel to full solar and also modernization of the network, including the data centers and based [indiscernible] then if all else anything is left, we will offset.

Thank you very much, Karen. And now moving on to our CEO, Peter. It's a couple of questions for you, but let's see how much you can do with the time that's left. The last one is from Maddy of HSBC. Can you talk about what you think will likely contribute most to your growth for the next 5 years? And if you could order them from the highest contributor.

Okay. Is this working? Yes. Okay. So I think it's a great question. We've always been asked this question by investors. What is that growth profile based on the [indiscernible] business that we are creating. And we've always presented in the following year, which is the traditional elements will continue to be flat or declined. So voice will decline or be flat. Although we are growing minutes of use and growing engagement, you expect mid-single digit -- low to mid-single-digit decline but is a mature business. The MTR elements will continue to affect it. The same thing goes to Boniface's territory, the P2P, the withdrawals and kind of transactional pieces will continue to be flat or low single-digit growth. The big areas that we see growing. And this is why M-PESA is and also mobile data is an area we expect double-digit, is continuing to digitize and automate payments in the same way that the team has demonstrated this morning to -- and have -- there's still a lot of cash in the ecosystem. We could actually automate through smartphone use. You had Boniface say that every time we move people from 2G to 4G, they transact more and so on and so forth. The enterprise side will contribute significantly to this element. So the payments piece, there's still a lot of growth that is expected. But the bigger growth we see is the next financial services, whether that is -- really, it is increasing the penetration of savings, wealth, investment and also going into other financial services area like insurance. And our intention is to go with partners rather than doing it ourselves or create products by ourselves. But clearly, there is still a lot of headroom for growth for M-PESA and financial services, in particular, in Kenya. The other area is data. On mobile data, we only have -- we've seen reduction in the price of data. We've seen accelerated growth in usage. The data customers are increasing and also the amount of data that's being used is increasing. We expect that to grow, and there are 2 elements. One, we've already have the network, 4G coverage everywhere, and you'll see from Morten's presentation, but we need to increase penetration of mobile devices that are 4G [ endeavored. ] We only have a third of our country, 4G -- of our customers having 4G handsets. If we double that over the next 2 years, 2 to 3 years, it will make a material difference in the ability of customers to use. Then of course, we need to provide the right content. So those are the 2 big enablers of growth on mobile. Fixed, there's still a lot of penetration. I mean a lot of work to do on penetration. We are about 200,000 connected customers. We believe there's 1 million customers to be connected -- that is also supported by what government wants to do in terms of fiber and Internet access everywhere in the country. So we see that as a big area. Enterprise is another area, and the Cynthia will be coming after the brief to talk about the opportunity we see in enterprise. And enterprise, both SME but also government elements. Of course, the bigger -- the other bigger one is geographical expansion into Ethiopia. So we do see those would be the big elements in terms of makeup of growth. In terms of what they make up that we'll talk a bit more during the earnings release at the full year because then we'll be able to give proper numbers. But in terms of direction, those are the areas to focus on.

Thank you, very much, Peter. You talked a lot around how we are driving affordability as an organization Modi of Citi would like to know if you could give us more color on driving affordability and which are the key areas where you think there is scope of reducing tariffs?

So affordability is very, very critical, not least because we see customers under pressure from an economic -- social economic challenges that we are seeing today. So customers are telling us that we need more intuitive, more affordable products and actually more safe products. So that's -- those are the areas that we are [ asking about. ] And you saw in the presentation, we talked about customer obsession. And the first 3 elements was ensuring that we do that. And our Net Promoter Score, we are #2 in this market. And the primary reason why we are #2, despite having better experience, better product set, better offerings is because of affordability. And that's one of the reasons why we have reduced the premium that we've had on [ Dica. ] Now it's almost flat to 10% versus our equipment competition. So the element now to focus on the mobile data is to make sure that mobile handsets are more affordable. So that's the area that we need to make sure either through device financing or through working with government to make sure that devices that are available are more affordable. So we believe that data is about the right price. In fact, Kenya is now starting to look at low price on mobile data. We need now to focus on ensuring that you have better and more affordable devices. On voice, that will continue to go down, both in terms of reducing the premium we have, but also because of way MTRs are because MTRs will continue to decline. And then -- but the area now to focus on as we generate a lot more volume is on the financial services, you have seen that we have reduced by a significant margin the cost of transaction on M-PESA whether that is free transactions or very low transactions, which Boniface talked about, which is 30% of our transactions today or actually starting to think about the credit side, which we are focusing on ensuring that the affordability is right there. But also on the [indiscernible] M-PESA merchant transactions and to all those elements, they have reduced by more than 50%. So every time we get more volume, we will not increase margin. We will use that volume to continue to reduce the price of our product. And then the final one is on -- we have a big agenda on productivity, which is lower cost to -- lower cost of production. That is all goes to finding lower price for our customers so that we can make sure that our products are more affordable.

Thank you, Peter. I think we can take one last question. We've got about 2 minutes, and this one is on the regulatory environment. So the question from Maddy of HSBC. What do you think of the current regulatory environment? And what is the regulator's biggest priority, prices or quality access to new tech services or what...

Yes. We are regulator business. So therefore, regulatory risk and regulatory focus will always be a major agenda that myself and the executive team will always focus on. And whether that is the CA, which is the communication authority, focusing on the GSM side of the business. And there, the primary focus is to create more better access. We've already done a lot of work in terms of network coverage. Now it is ensuring that you have mobile phones that are more affordable, but also voice rates that are more affordable, and that's why MTRs have continued to come down. So the regulatory element there is with respect to how we interact with our competition, how we share assets. One of the areas that we are really going to be focusing on, and it will also allow us to get better and lower cost to serve is sharing towers. And that would be a big area of focus for us. Interoperability, the other area that we have really been focusing on as far regulation is concerned, both in the GSM, but also on the financial services side. When you look at the Central Bank, the main thing is to make sure that customers, financial assets and data is safe and secure. So the technology -- the investment in technology had been very significant, and then the affordability elements. So we have worked with the Central Bank in terms of all the very pricing element, not because they have to sign off, but because we are an important enabler of our ability to offer services that are more affordable. And then, of course, the interoperability on the matchup side, which we completed this year. So we'll continue to make progress in that respect.

Thank you, very much, Peter. Thank you, Karen. Thank you, Bonnie. And to our investors and analysts, we have -- we do have a number of questions. We shall endeavor to answer all of them. We have a longer session for Q&A in the afternoon, slightly over an hour. So do not worry, we will address all your questions, let them keep coming in. And Dilip, back to you.

Thank you, Peter Karen and Boniface. And thank you, Caroline. I'm also thankful to the investors and the analysts for asking those questions. Our next presentation will be from Cynthia Kropac, our Chief Enterprise Business Officer. And what -- the best way to integrate the questions that are coming from for our future growth. And the theme for today, which is delivering purpose led growth Cynthia, take it away.

Good morning. I was so excited to be here today. Really excited. I actually forgot to have breakfast. And when the tea-break was announced, I didn't do that either. And then as I was sitting here, I was hit with an expired moment. I could stand here and let Zuri do this, right? So Zuri, could you do this?

Yes, Cynthia. This is the moment I've been beating for all my lines, Oh my god, ladies and gentlemen, wait. Does it come with the part of being Chief Enterprise?

Oh, no, I'll keep both. Let me do my presentation. So thank you. Thank you, Zuri. Ladies and gentlemen, thank you. It's a privilege to be here this morning. Cynthia Kropac is my name, and I have responsibility for the enterprise business organization. Enterprise includes business is small, large, government and also our wholesale business that we interact with other network operators or Internet service providers and like Peter started off this morning talking about our purpose being a purpose-led technology company and that's our aspiration. And the enterprise business organization is very much in alignment with that. in the buildup of developing the technologies that will be the foundation of what will help customers accelerate plan and accelerate their digital transformation. As a business organization under Safaricom, 1 of the commercial units, we -- according to the last fiscal year reporting, $42 billion in revenue, so nothing to [ see ] that, and have been growing at approximately 27% year-over-year over the last 3 years. And that combined both the traditional GSM side of our business, as well as the new growth areas led by cloud, security and applications. Those are actually going at high double, triple digits. That's what helps lift this number up for us. As an enterprise organization, in our mission, our customer is a vital part of what we do and why we do it. Our people are a key element in bringing this to life. And as part of my presentation today for enterprise, is letting you hear the voice of the customer and the voice of our people, and we will integrate that as we go along. So you heard me say we support enterprise businesses all shape and sizes, small to large, governments and also wholesalers. While they're all different in their needs and perhaps aligned in some ways on an industry basis or on a size basis, they all have a common thread of what they are looking at. One is awareness and particularly down the market, having an understanding of what are the technologies that will help me grow my business? What are the technologies that will help people be aware of who I am and how I could support them? And then once they do find that out, if they do find that out, then the big question is, can I afford it? A lot of this technology is birthed outside of the continent, typically priced in dollars or euros, and largely unaffordable for the SME, who's making the equivalent of less than $5,000 in revenue a year. So creating that awareness, creating that affordability. And that question of affordability doesn't stop with a smaller micro business. It's the same question that larger businesses are looking at as technology is just another core ingredient into what they do for their businesses, and how can it be more in line with cost reduction initiatives they have even as they look to technology to power their business. Just a backdrop that we look at in the enterprise business, there are really 3 core things that businesses are thinking about. #1, customers have changed how they want to interact with the business, and how they want businesses to interact with them. So it's no longer a choice for a business to decide if they want to digitize, if they want to transform. Transform they will and they will have to, or they'll be disaggregated, or will be left behind as customers make a choice of where they choose to spend their money. And as you could see in terms of the infrastructure growth that we have experienced in this country, there has been a greater willingness for customers to interact on the Internet. And that has exploded over 120% over the last 3 years. And this is not just what happened during COVID that necessity, that interacting online. But post-COVID, customers interaction on online has grown 63%. So that has persisted and grown. So companies that want to interact with their customers in a more effective way have to transform, have to digitize. And as we digitize, they're now open for a whole new set of threats, cybersecurity crime. If there's any one issue that keeps a business CEO or a business owner awake is all of these threats that are coming at them, and they may not be equipped to be able to handle them. That's if they even aware about the threats. Remember, I talked about [indiscernible] market, there's an awareness gap. And further upmarket where the awareness gap is there, that's a really concerning thing. And if you look at the statistics, as reported by the communications authority, last year, last year, 450 million threats, cybersecurity threats were detected. And they resulted in a loss of about KSH 54 billion. This year, and this is just today after Valentine, February 15. This year alone, the number of detected on 500 million, more than the entire last year alone. So even as companies think about how they interact with their customers, how they interact with their stakeholders, their suppliers, their financial institutions. As all of these interactions go online, cybersecurity becomes a must, must address issue for any business. And then wrapped around all of that is the role of government. And government has a key role in driving the economic development of this country. And Kenya's ambitious goals to do so are right in line with that. And the country is leading first in what it does, in digitizing -- plans to digitize and are already digitizing many of the services that they're interacting with the citizens on. Additionally, they are looking to raise the literacy level of digital in the country. And as that happens, as they raise the scale level, as the infrastructure is spread throughout the country, the need for this type of solutions that enable the small business, that enable the average citizen become very, very vital. And we come back to the same common themes of access and affordability. So what's the opportunity? So I talked about the exploding growth, the changing in consumer behavior and the need for companies to change and take advantage of this opportunity. We see that growth in what has colloquially been called new growth areas, and that is the infrastructure, the fiber that connects the business. Cloud where all of that data that is being built and developed by all these businesses, where does it go to be stored and kept and kept safely due to the cybersecurity issues that exist. And then Internet of Things, how can machine being make smarter to help businesses become more efficient in the utilization of that resource. I'll pause for a minute because it's not a slogan that we are customer obsessed and they are a vital part of who we are. I want to take a minute and introduce a company Mwananchi Credit, and I'll ask Andres and Anders to please stand up. Those are the hardest names to pronounce. They're actually different. They sounded different, didn't they? 2 different names. Our customers from Mwananchi Credit. We're going to roll a video that we'll talk about the company that has grown from just a handful of customers to hundreds of thousands of customers and the impact of connecting technology and cloud-based capability to help them manage their business. [Presentation]

Oh, we can do better than. That's an example of a company a few short 7 years ago, who would have been classified as a micro business. And the type of solutions that we're consuming at their start were very simple business solutions. And you could see as they have grown and they look to Safaricom as a trusted technology provider, that we're with them every step of the way as their needs fundamentally change. And while they may colloquially be called as an SME, I think we would all agree, that's a medium business aspiring to be a large and, certainly, a global business. And that's our role as a technology provider is being hand-in-hand with them to provide them the type of solutions that meet the ambitions. Businesses are aspirational. They don't invest where they come from, they invest for where they're going and Mwananchi Credit is a great example of those investments. I talked about cybersecurity crime and the rate of growth and the tremendous cost that cyber threats cause to the economy and certainly to the business. I wanted to introduce a customer, Mr. Joseph Bee. Mr. Joseph Bee. please stand up so the crowd can recognize you Mr. B is the CEO of Bandari Sacco, yet another business that we have grown together with in providing them the types of solutions that help them meet their goals and objectives of being a financial services provider, security being an underpinning of that. Thank you, Mr. Bee. So let's please see that video. [Presentation]

I am sure -- I am sure Mr. Bee. would have that last part changed because he will be online and will be a technology partner in moving customer forums. And this is the application for which largely in any success paper-based and moving back online. Two key things that you heard in that video. One, buying a cybersecurity solution enough is not enough. The ongoing nature of the threats that are continually evolving will require organizations to have constant health checks. And that is not something that's won and done. It's something that must be invested in on a continuous basis. Second thing you heard, his core business is being a financial institution, not monitoring and managing cybersecurity threats. So investing in managed security services and professionals who do that for a living is a very important thing. One last customer, I want you to meet, and this is Edings. You heard me say that government has an ambitious agenda for digitization. And certainly, they're a key enabler of development. IoT is 1 of the places that we play a big role with government, particularly in the management, effective management of the country's natural resources. I want to recognize Mr. Peter Kibet Biwott, MD Eldowas Water Department; and Mr. Charles Koigi, and he is a key partner with us that is working on IoT propositions that help the government and, in this case, leverage IoT capabilities in managing a critical resource, water. [indiscernible] and we'll talk on the other end. [Presentation]

At the end of the -- I'm wrapping up my presentation now, but I will be seeing you at the back of the room, so you have an opportunity to see these solutions and these customers talking about the impact of these technologies on their businesses, not only in securely connecting them, but being part of the transformational journey and investment for the future. I thank you very much for your time. I will hand back to Dilip, but I will be seeing you at the end of the room here in a few minutes. Thank you for your time this morning.

Thank you so much, Cynthia. I think we can do better on our clapping huh? So as I was talking before Cynthia came in, that you get -- you actually get to see what you're doing. So sometimes, when you speak to the investors and analysts community during our earnings call. It's mostly -- I mean we talk and then you ask you questions, but this is a very different atmosphere where you can be a little bit more deliberate and to see exactly what you are delivering. So what I pick out from Cynthia's presentation was how we are really helping and supporting a digital transformation for our customers, and how we are enabling and how we show up as their customers, the preferred partner in every solution that we're providing. And that's a big shift. As you can see, it's not big in the sense that the number of customers or things that you are doing, but has immense opportunity. I think the other thing what I want to highlight is sometimes customer stumble, confirm and validate what we are doing, are we going in the right direction, and that was also visible. And we'll get to see that also in the exponential presentation later on. Now again, time for you to look at the screen for the slido.com and fill up your questions and the code, again, repeating 1786248. Don't forget to put your name and the institution you present while you close your question. What better way to connect solutions, future technology, digital transformation, all that you're talking about, but where does this all come from? Technology. So let me now invite Morten Bangsgaard, our Chief Technology and Information Officer, to give his presentation. Welcome, Morten.

Thank you, dear Dilip. I always call him that during the [ Pocket ] season. So if you look at the photo here, this was taken around a week after John Safaricom and we were taking the company photos. And I want to get -- I thought I would look nice for that and I went to get a haircut unfortunately, the young man and I had different definition of what shorter means. But now we can stop looking at that picture. So. Okay. Sorry, let's go back here. So my name is Morten Bangsgaard. I am heading the technology division in Safaricom here in Kenya. So of course, a lot of what you see. I'm working with my colleagues here to bring to reality. I'm going to talk about some of our key focus area when we look at our 2025 vision of becoming a purpose technology company. But let me start with a couple of [indiscernible] we have today. We are having a leading coverage in the network. We are having a [ 96% ] 4G coverage. So we have 4G almost everywhere. We have invested heavily in our fiber infrastructure. More than 75% of our sites are now connected with fiber, which means you can say they are ready for 5G. In parallel, we have [indiscernible] on fiber both businesses and enterprises, connected more than 1,000 new buildings this year. And at the same time, we are rolling out more than 100,000 new homes on the consumer segments. [indiscernible] backbone. We have M-PESA in 3 different locations in the country [indiscernible] any issues has also led to our uptime. We also had a solid spectrum portfolio. Both spectrum used for the main current technology, 2G, 3G and 4G, but we also have acquired spectrum now, so we are ready for 5G rollout over the next coming years. In terms of the uses on our services, we continue to see a heavy increase in our demand coming both from our mobile customer, driven by increasing 4G devices and increase in using streaming services. You see the similar trend in our fix business and also in our M-PESA business, as Boniface mentioned, driven both by the new functionalities, some more transactions and more customers. We invest more than anyone in the country in a robust infrastructure, which also we can see in the feedback we get from our customers. Our Net Promoter Scores are leading across the experience, across our mobile and our enterprise and our fixed services. But let me talk more about what is sort of the key priorities going forward. With the last couple of years, we have invested heavily in enhancing our analytics and big data capabilities. We now are able to collect over 5,000 data points on our customers. We are now able to analyze them, give personalized offers at the right time to our customers in real time. We have also invested in capabilities in much more detailed customer insight in how do they experience when they use our products or interact with us. So for example, if anyone clicks on the M-PESA app. We have seen -- we know real time whether this customer had a successful transaction, how long did it take to get a response, so any small variations, we can now react promptly on the customer experience. We recently launched a system that can do the same when it comes to our network experience. And I won't talk more about that because you will see 2 examples and [indiscernible] speak to the team afterwards in the back of the room. Another key focus for us in order to fund our investments into the newer growth areas as we have a company-wide productivity program. And we use technology as an important part of how we drive our cost base. So just a few examples on what we've been working on. The first is our cost to serve our customers. We continue to invest in our digital channels. You can see the technology behind the chatbot. You have seen here is home developed by our own people. And it's handling thousands of calls that are deflected from our call center today. So we are now having more than 80% of customer interaction that doesn't need any human assistance, and that number is growing. On a cost to operate, we have been running sort of a robotic automation squad on our [indiscernible] setup here. And that is focusing on taking more manual process and simply automating using technology, and that is run across all parts of the organization. When it looks to our cost to build, this is mainly linked to our CapEx investment, we are partnering with a procurement company, which means that they run global tenders and have the volume, both of Safaricom and of course, all the Vodafone companies. We can be part of that. And in the recent tender on our network, saw a more than 20% savings across all the big network categories. And finally, what has been discussed a little bit earlier today, the cost to run our network, energy costs are more than 40% of the cost to run the network today. We have a [indiscernible] 12 months ago, multiyear program and investing in renewable energy in solar to partly bring down [ carpet ] of cost, of course, also to support our sustainability goals here. We'll also be able to see the -- stick to the team and see how much the effect of that. But in average, we are saving around 22% for energy cost on sites where we run solar. When we look at 5, 7, 8 years back on the telecom industry, a lot of innovation was coming from your core platform. So you competed on having a different bundle, a different price rate, how many days, M-PESA as Boniface talked about Phase 1. It was basically person to person or deposit, withdrawals. What you see now is innovation comes from many more places in a ways it comes from internal in the company, innovation could come from taking a partner products and combining with our capabilities. Innovation could come from completely outside the company, just from the fact that we [ morph ] our technology to the outside world. I mean I think we saw a good example earlier here that we now have more than 50,000 developers certified to develop on M-PESA where they can start up in 5 minutes, we don't need to get involved, and they can innovate just because we opened that system. That is a big focus for us and technology is doing that across everything. We do in trying to build openness on all our systems because we don't know where innovation is coming from in the future. We call this layers of innovations. A good example is how this also worked in practice. If we talked about the [indiscernible], the government initiative for affordable loans and savings, it was announced in the middle of October last year with a launch date of 1st of December. And if you look at what that consists of, so we had 6 weeks to help and support getting that app launched. It consists of a loan element where we already had that in our M-PESA system, consistent -- or we had to develop a new app. So a case the way we structure our technology, we could develop a new app. It has fund coming from third parties, so the whole third-party integration, of course, the money had to go into the M-PESA wallet here. And of course, we already had a security framework. So because we have thought about opening our systems together with the government and other partners will be able to launch that in only 6 weeks. And Peter talked about, I think, $18 million in 2 months. I think we had $12 million in the first week using this system after 6-week effort. When it comes to our broadband strategy, we are using different technologies today. On 1 hand, we have the 4G. As we talked about 96% population. So that's a fixed wireless product that is available everywhere in the country. We recently launched that on 5G as well. Of course, using advances of 5G technology and the efficiency of 5G. So for the same price point, you get more data where we have 5G coverage. We have invested heavily over the last few years on expanding our fiber network particularly in an area where people have a demand for high speed, high usage and can easily scale as the customer requests more. We also see a new opportunity for us in using technology to provide broadband around the country. It's not only that uses wireless, it's typically been used for Enterprise segment is points are coming down now. And we are seeing a part of the market that are interested in an always-on experience, but can accept lower speed for a lower cost. And this is sort of the next phase we're working on, and we launched on when it comes to sort of complementing all the technologies we use to bring broadband to the market. When it comes to 5G, as you can see, it's growing in a number of devices, but it's still a limited market for 5G. As we announced after our half year results, we would have roughly 200 sites by the end of the financial year. And the way we think about 5G, now we're going to grow with our customers. We are prioritizing areas when we look at combination where the growing 5G device penetration, where do we -- where there is no fiber coverage we can see 5G playing a role for our home solution or business solutions or similarly in areas where we can see we need to enhance our capacity or network. We won another spectrum on 4G and we'd rather invest in 5G as a more efficient technology than 4G. And of course, we'll continue to invest over the next coming years in expanding the 5G in the country. And then the final part I'm going to talk a little bit about, and this is, I think, the most important part is, if we want to be a technology-led company, we need to have the capabilities internally to build technology solutions ourselves. And of course, sometimes, as we saw examples here in video from -- since with our local or global partners. So we have higher than 300 developers over the last couple of years. We have invested in an employee experience as a special career path for all our specialists and engineers and the technology organization. And outside, our customer funding part of the organization, we have over 2/3 of our colleagues now working in an Agile set up, which was part of the company-wide transformation that Peter was talking about. A lot of the things that you experience now with the Safaricom is now built by these teams. MySafaricom app, if we use that. And so the chatbot Zuri here. If you go and register a line, all these kind of technologies is built with us. And we have the biggest technology transformation from an internal use in the country. So we also see a big opportunity to work together with [indiscernible] enterprise business to take these competencies and work with our enterprise business and government business and bringing this to life. Some of the internally developed applications, there was only developed with internal focus is now being sold to some of our enterprise customers. We talked about the cybersecurity center we have here. Now we have 8 customers and growing that are using the same capabilities we have here. So I'm going to end with a short video that talks exactly how are we building this engineering journey in Safaricom. Thank you. [Presentation]

Just before I summarize what, what indeed. Just 1 small announcement. We found a cell phone. So in case that's the 1 you have lost, I just look through your phone and please get in touch with Caroline, she had the phone with her, okay? All right, Morten, and thank you so much. And Morten says that people remember him only when things are not going right. Otherwise, when things are going right, no one remembers Morten. but Morten, thank you so much for this. I think what we saw is and what we believe in, technology is the heart of our business. It's not technology for the sake of technology. Its technology for solutions for customers. What we heard -- I think repeatedly, you heard me talking about how we're building internal capabilities. And why that is important? You can't -- despite being a technology company, if you don't have those capabilities. And those numbers are staggering in a time when -- it's not necessary that there is a lot of opportunity for new hiring, but you have done that. And we have done that, I think almost -- if I remember correctly, almost increased our communities around engineers and developers, all of them are almost 4 times for us before and what we have today. And that builds us the confidence in the foundation that we are on the right track to become purpose led technology company by 2025. I think what you also saw in [indiscernible] progress is moving to a solution will also require a lot more thinking about what the customer needs are. And the opportunities that you have, what Cynthia has spoken about in the Enterprise area, and then also the accelerate new growth areas across all the articles that we spoke about and also the government [indiscernible] initiatives. So we're very excited about the opportunity. And I think that can [indiscernible]. Thank you, Morten. Now we would like to spend time on the experiential Jones and both Cynthia and Morten will guide you through. So I think we'll start with Cynthia. Cynthia and Morten, over to you the guest exponential zone and those of you want to be here and present see in the big screen, you can do that.

Ladies and gentlemen, if you could please proceed to the back of the room. We would like to invite you to share some time in our booths where we'll go through each of the solutions that I talked about in the presentation. Smart metering and the role of IoT in driving business outcomes. We will also be talking around digitization and the impact of investing in that for company growth. And we will also talk about the importance of cybersecurity in an increasingly -- in an environment that's increasingly full of cyber threats that companies must be prepared for. So please come on to the back. We would like to have you here. And we'll also have an opportunity to engage, not only with my fellow teammates from the Enterprise business organization, but as well as the customer who is present in the room. Thank you. So you could please come back. Thank you. Thank you. So in the interest of time, we'll go ahead and get started. We're going to have 3 stops. We'll spend about 8, 10 minutes in each 1 of the booths. As you have questions, I'll take them at the end. Or you have questions, you feel must be answered them. burning questions, we'll be happy to take them. I'd like to invite Mr. Biwott , Mr. Koigi to just say a few comments before we hand over to my colleague, Jerry, who will talk to you more about the opportunity in IoT.

Thank you very much Cynthia, a same [indiscernible], country uses about PLN 11 billion when it comes to even water. The country average is around 6%. In our company in Eldoret, we use about 9%. So even if you see this in the water sector is likely to reduce this. i can give you 2 examples where we implemented Smart Meters in Eldoret , we [indiscernible] at water to 5%. And in another area, we reduced to about 7%. So [indiscernible] is going to have the country to meet its goals, especially when it comes to sustainable development [indiscernible] on water and sanitation for all. So our partnership with Safaricom is going to help a lot. I want to add you to get interested in providing solutions in the water sector because there lies a bigger opportunity of -- and selling that we invest in Smart Meters, and ensure that we increase access of water and sanitization by tenants, ensuring that there's no loss [indiscernible] water. So these are some of the opportunities that exist in the country level. We have about a target of 100% coverage by 2030 in terms of what access and about 80% in terms of sanitation. So this, I think the Smart Meters, technologies when we invest in them, we'll be helping the country to meet our [indiscernible] and applications. I would like to add the investor to get interested [indiscernible]. We are a pioneer company -- water company in can we have 1, water service providers. After we invested in the Smart Meters, we received allocations as far as [indiscernible], from the [indiscernible] on an accuse in our engagement, we are looking into due to investing in about 25,000 meters, which are over 20 years old in our systems. [indiscernible] have a 5,000 connections. So we can start and pilot between 5,000. We believe that Eldoret what I will do from [indiscernible] something like [ 30% ] the national average. But I think you mean just more, we can go below [indiscernible] that pass is an advanced country, but I think we can do with the help of Safaricom [indiscernible].

Thank you. Thank you, Mr. Biwott. Maybe we take a sweet to Jerry and Jerry perhaps paint a picture, not only about what we're doing in Smart Metering and Smart Water, but what the opportunity in IoT is in helping this country progress its economic agenda.

Good afternoon, ladies and gentlemen. Thank you, Cynthia. So the IoT space is it's [indiscernible], which basically means all of us, as provide us at the same level. And from a customer's perspective, which means customers are now beginning to adopt smart technologies, which means now we need to [indiscernible] customer education and work with relevant partners. As a company, we strongly believe we are well positioned to lead this particular space. That is our ambition. That is what we are working towards, and we are going to achieve it. So our strategy focus is around 4 critical things. #1, much cost forecast IoT about solving as a problems, delivering business outcomes for customers. We've heard from the MDs saying that they're dealing with [indiscernible]. We have a strong vertical focus dealing with different sectors of the economy. #2, we have strong technical expertise. Over this financial year, we spent a lot of time they're [indiscernible]. We have IoT who look after devices look a software, and we look at our platforms. And this engineers are in-house engineers working to continue to develop and grow and harness [indiscernible] in this area. So the most important [indiscernible] partnerships. So with the cognize a fast factor a telco, transitioning it to a technology company. So we might luck expertise in different fields. For example, we are learning manufacturing, we are learning health, we are learning water. So for us people to have a very solid go-to-market strategy and address these customer output, then we have partners in different companies, SMEs, large enterprise, that come in with the strong vertical expertise that gives credibility to the solutions that you're working towards. Lastly, is the strength of our network. So we've built a very huge network. The question is what we now do we do with our network [indiscernible] the same set that you participate. So we [indiscernible] narrowband IoT, which is specifically built for the IoT devices. What it does? It helps in battery power, and it helps in coverage. So we built a narrowband IoT network and now that you're doing. So anywhere, in this country, anything that needs to be connected, we're able to connect. Now we started this journey 4 years ago. We have to understand of our network. We started with IoT connectivity. We are now transitioning into end-to-end customer use cases or full stack solution. Why is that important? Moving from the connectivity layer to the end-to-end customer proposition, we'll see an increase in ARPA of up to 18x relative to what you're getting today from connectivity. So this transition then becomes important for us to build and grow a sustainable business. So for us [indiscernible] today, we started with 3 key use cases. So fixed management. We manage our truck assets. We look at driver behaviors from health and safety perceptive and from operational efficiency for different organizations in different companies, also monitor consumption of their sources like fuel. The second is utility management, energy, water and working our way into LPG and gas and our experts will explain what exactly we're doing around water. Third is [indiscernible] for management, any product that is humidity and temperature sensitive, we're able to track in real time today, both in their cold rooms and in transits. So we both do the cold room storage and also the cold room, the cold chain logistics. As you look into the future, I'd say we have a strong vertical focus. Work will begin work in this coming financial year around [indiscernible], agriculture and health we believe are critical verticals for these countries. So yes, switch is great for IoT. We strongly believe we are going to lead this market, but it's our ambition at going to achieve it as that are going to do in.

Thank you. Thank you so much, Jerry. Thank you, Mr. Biwott. Mr. Koigi, we will circle back once we get through in the Q&A period, but leveraging our core asset, which is the network, key partnerships to drive meaningful business outcomes is the entire proposition of what IoT is. We're going to shift gears now and start to talk about integrated propositions. You heard Jerry talking about just pure connectivity alone, just connecting it doesn't drive the outcome. It is the capability that you stack to then create that outcome that becomes keen to enable business growth. So I have Mwananchi Credit, I'll introduce Andres again and just 2 minutes just to give a brief overview on what this technology and integrated propositions have meant to your business. And then we'll hear briefly from [indiscernible] and Susan, who can talk to us more about the technology. There you go.

Hello. Thank you, Cynthia. I think it would be fair to say that Mwananchi exists partially thanks to Safaricom. In 2015, when we looked at the micro finance sector, we saw that it's -- the business is down very much old school. So clients are going to the field. Cash is basically collected with the field. And when seeing all the beautiful technologies, which Safaricom has M-PESA, mobile network coverage USSD, we know that we have to bring all these technologies into micro finance sector and this is basically how Mwananchi was started. And these technologies, they have been essential element to bring us where we are today.

Thank you. Thank you. Evelin, Susan?

Good afternoon, everyone, and thank you for making time to join us today. So the revolution of technology in Kenya has actually changed the way we think, between the way we interact with each other, the way we communicate with each other, the way we even run our daily lives and even in our home. Therefore, this has also caused a ripple effect in technology, in innovation and growth across different ecosystems. Statistic actually indicate 67% of businesses to be [indiscernible] you can actually grow and actually adopted e-commerce to be able to understand and to be able to serve customers who have often instead to be able to transact and to buy services, food and survive online. Other to that, if you think about the current demographic of Kenya today, 75% of Kenyan demographic today are people who are below 35 years old. They're 35 years old, and that means it's our customers or these are individuals who definitely want services with speed, they want reliability, they want affordability, and they wanted it now as their [indiscernible], but they will not compromise on their quality of the services [indiscernible]. Now this is the reality that currently we're living today. Now I'm proud to see that Safaricom has actually walked the journey with our customers today. So we already have use cases that we have been able to transform businesses as we speak. In line with the government's agenda, to be able to move 5,000 services to the digital platform, Safaricom has already supported the government and is currently supporting the government, and we currently have more than 400 services available on the [indiscernible] platform. Nairobi Security Exchange intrusted us to be able to offer and support their trading platform, which is a critical component for the economy of this country to be able to offer a reliable, secure and stable infrastructure. And we are proud to say that until today, that service is up and running, and we have not experienced any failures. We've had for an to credit. We have about tested and thank you and we are humbled to have you with us today. And they were tested that adopting technology has allowed their other business to be able to see fundamental growth in that business. And this is the effort. And this is the role that we play as at Safaricom. So this is a crucial season for us. It is important for us to continue driving this agenda. Now the truth of the market is most of our customers today are not where they're supposed to be. Most of them are grappling on how they will be able to -- be able to invest in all these things. Technology is changing every day. It comes at a cost. Your customers are changing. How do we help them in this transition. That is the role that we currently play. So businesses today are looking for a technology partner who will be able to offer them the right platform. The right solutions to be able to address the market shifts that are currently happening. They need to stay on top of the game to be able to address the competition that is currently very aggressive in the market today. They want tools and skill sets things that we will be able to help them respond faster as their customers are evolving. So what is our takeout in this session today. Our take out from my session and this session here today is that as investors, as the people who are running the growth of this country. It is imperative for us today to invest in 4 critical things. Number one, we must invest in the right skill set. We must invest in the right tools, and we must invest in the right strategies and the right technologies to be able to address the growth that is already happening right here with us in the future. So I will allow my colleague, Dilip to take us through the possibilities that we know we can be able to offer, thank you?

So starting the enterprise of tomorrow, then we must not just connect them we need to secure them. We need to enable them and we need to transform them, right? So if we do these 4 things, then the potential for enterprise, Safaricom business, to be clear, is that we can be the leading integrated managed services provider in the region, and that's a real possibility and [indiscernible]. [indiscernible] of our Kenyan base today, it's going alternate buy the products and services. By all means that we are already at the forefront of this evolution. Why? Because we have the largest network, we have the most of the technologies in place to support our customers, not just connect to the applications that they're backing on the cloud, but to also communicate and to run the transactions that they need to run. What does this mean for the enterprise customer? It means that they have to make a shift from the brick and motor and let the customer at the point of where it's convenience and fast and its relevant for them. So what's the role for Safaricom business at this place? It means that we as at Safaricom business, these are customers have the absolute duty and responsibility to transition them and do so securely. You might have where they might believe that we have the right people to secure them even as we make these transactions given the fact that we've already enabled them to reach the global market. Today, we are able to secure 2,000 transactions as second on M-PESA, and that's proof enough for any customer that we have the competencies to actually provide security even as they do this business. And my colleagues down the line in the next group will be able to give you more about the cybersecurity space and what you chose and hits you're paying industries. But just to let a little into some of the things that my colleagues talked about, about enabling the -- about the fact that the enterprise customer has an end user who's very designing, who need convenience. And to be honest, if you look at ourselves today, if you look at what our [indiscernible] today, you will go to alternative A. And if you click, it doesn't work in a split second, you move to alternative B. And your expectation is within 2 clicks, you should be able to know where the driver is, when they're coming, how much it is all of that as a transaction.That's the kind of pressure that the enterprise customer is going under. So does that mean that we just provide them with the technology that they need? No. As Susan had expressed, they need an IT adviser, they need somebody that will be able to work in the channel to see what is the mix of solutions that is required, just like what credit has porting here? What is the mix, the right mix of solution and customize not so that the enterprise customer then is able to try and have a value system that is so well oiled, that is able to provide the convenience that the end user is looking for. So we, as Safaricom business invest in the right talent pool that has the breadth and the depth to be able to provide this combination of solutions that is required for the enterprise customer. Having enabled these customers, the ripple effect of that is that then the ecosystem around which the enterprise customer is living needs to be transformed. And I'll just give a simple example for that. If you make one business cashless, and cashless here doesn't mean just providing them with a [indiscernible], but to integrate touch to their critical systems, it means the suppliers of these organizations, then have to change behavior and adopt the cashless system as well. It also means that the enterprise customer, the end user has to adopt the cashless system as well. So you have to build an ecosystem and build solutions around the ecosystem. The -- what that means for enterprise business is that we need to invest in robust platforms but then can provide solutions in different mixes of technologies for different ecosystems and then we'll be able to deliver the real value to the end user and the real value to the enterprise customers. So they conclude to have this one analogy. The Chinese bamboo takes 5 years underground, being watered, being cared for, but the minute it grows off the ground, it grows 24 millimeters in a day. This is where we are at. This is why enterprise customers are at, and this is where we need to be. The future is now. Thank you.

Thank you. Thank you, everyone. Thank you very much. You must connect securely connect and then we enable and empower businesses for growth. Last but not least, we're going to talk about cybersecurity. We talked about the growing threat that this is and the imperativeness for managing the health of a company's environment in terms of the threats that they are susceptible to. So I will seek to [indiscernible] for 2 minutes, just to give us a quick perspective on the impact of security through a financial institution. And then Peter will then take away with Steve to give you a few comments.

Thank you very much. As I've been said earlier, the Acosta partnership with Safaricom in 2018. When there was so much cybersecurity hacking and since that time, down the line, we have never experienced any attack. Well there are attempts, as you can see, as I've been said, but one of the things that we really have to appreciate is that Safaricom gives you the fast touch in the sense that they are always there with you. We do annual trainings to our staff where they move. We have over -- we have 3 branches and every staff is trained on cyber security awareness. Besides that, they also do the audit, our system audit and give advice where the weakness is, which area we needed to adjust, and that has really helped us. And that has what has made us to be -- because every investor, as you are aware, will always be safe, where his money is safe but that I can guarantee. [indiscernible] is the best because of the services we get. I also have to commend their staff, especially because the way they have a customer [indiscernible]. That means they interact with us every time down from our customer care officer that is Mr. [indiscernible] to the managers there heavily and they went to the chief officer who even visited us last year in December, simply to come and see and find out what is really happening on the ground. And now that the technology is growing very much and growing very fast. And it's a threat to the businesses that are coming, it is really important that you invest in cyber security because without that, you will be investing, but you will not be getting the returns. It's like having water on a vaporated container. So the more you put water in the more water comes out. But with cybersecurity with threats that have been contained, you will be able to then get more customers to even get more investments and be able to move forward. And so we have seen it, it is an experience and now especially the financial services, the saco sector. You remember now that even what the government is doing as per the hustler fund. Quite a number of people will now be moving to the savings, which they are trying to promote, all this, if the security system is not put in place, then all the investments must go to fit. But so the best and the best partner in that is Safaricom. We have tested. We are with them, and we have seen they are moving so well. So everybody who wants to invest, who wants to get the best security system, we have tried them outside there. And we know you might invest because there are a lot of security systems, there are software that you will buy. But remember, technology keeps on changing every now and then. So today, this year, another one will come in the system, you go buy it, you invest in it, next year or even 6 years down the line, another one comes. So the best for you is to have professionals that we'll be able to take you through and be able to take care of your system. And when it comes, of course, I can assure you the costs are very minimum. And even if they are a bit increase, you can sit down with them. The CEO is here, and they are able to listen to you. Thank you.

Thank you. My name is Boniface Gitonga Mungania from Mani Securities Services. What is Mani security services is simply cybersecurity as a service. You're a business, you have grown from 50 employees to 500 employees. You have 100 customers, you're going to 1,000 customers. We come in and give you a secure internet link within intense your network by doing cybersecurity audits, by doing some security assessment and awareness to your people. And we also monitor for threats that Cynthia had mentioned in her presentation, where we are able to monitor the threats, we are able to prevent them and we will report on real-time escalations, daily reports, monthly reports and quarterly reports to show your company risk portion. In terms of how do we do this as a our customers, they are able to procure their service through on demand. They're also to consume it when consuming other service and pay as you go. They're also able to purchase upfront by investing on a huge CapEx. And going forward, it's a minimal cost to whom do we give this service, as Cynthia had mentioned in her presentation, it targets the micro sector, the small, medium, large enterprises, the public and also wholesale. In the M-PESA ecosystem, we have over 300,000 small medium enterprises and over 50,000 large enterprises and public. All this, they have concentrated and put their efforts in building and growing their business for getting security, and that is where in partnership with surface for many security, we come in and give them the service. What is the value? We have structured managed security services over 4 years, and we have no noticed and got a 100% return year-on-year growth in revenue and also in our customer base. With our Head of Department here, we have [indiscernible] direct team that interacts with our customers and 65 cybersecurity professionals who are supporting over 250 customers and scaling by day. What is our strategy as managed security services. Number one is profitability. We want to be the market leader in offering managed security services and having a revenue of KES 4 billion, which is a fraction of what we presented in terms of cyber budget and spend of KES 8.2 trillion. And therefore, we look to cover our strategy and my colleagues, Steve will continue.

Thank you so much, Boniface. I just speak about some of the solutions on how we get to do this. One is before we get to give these solutions to our customers, need to come in and as [indiscernible] ecosystem show the guest that are there and then help you to build a cybersecurity road map that will get embedded in a cybersecurity strategy. So how we do that is do assessment, run assessment on your ecosystem provide your reports on what you need to start -- where you need to platform and what you need to implement. Above that beyond -- above and beyond that, we also provide cybersecurity training and awareness. This will help us get to also tighten and strengthen the weakest link, which most of the time is the staff, it is the people who are interacting the technology. It is very important for us to understand how and what is the impact of this technology that we are embracing, this technology that is empowering our business and what are the risks when you're getting to have this technology and power some of the solutions and services we are providing. Beyond the sides that we provide as a business, we also embed and bundle them with cybersecurity solutions when we say about security solutions. With the connectivity solutions for Internet, e-mail services and hosting and for services that we have at Safaricom ensure that the cybersecurity platform is well done. [indiscernible] security, even for the services that the business are consuming from Safaricom. Within our own team, we ensure that each and every service a customized [indiscernible] from Safaricom is well secured and well protected. Some of -- one other product that we have is -- that prevent -- which helps in implementing these solutions. After giving an assessment of where the gaps are, we get to also provide prevention on those control -- providing controls and that's why we have a 24-hour monitoring and visibility. So that's what that shows what incidents coming, the speed to response and also help you in incident management. Also allow my colleague, [ Jatin ], to just touch on the people that are getting to help and deploy these services.

Okay. In terms of people who are able to manage services as managed cybersecurity services. We have our staff who are highly skilled and are able to effectively give the proper rights to our customers in terms of creating awareness to their staff as well as being able to actively monitor the incorporated solutions we have within our product. So we've also collaborated with our local and international partners who are able to give less to grow our portfolio in terms of all the cybersecurity solutions we offer. And for our technology, it's currently hosted on a stable platform, which offers reliability and availability 24/7 as well as within corporate innovation, which is key to help us reduce on our operation costs and improve how we deliver our services. So [indiscernible] will touch on -- what is I ask from you today?

Our ask from me today is to socialize managed security services with your network, whether it through the business meetings you have in hotels through your internet profile to bring them and consume our services at Safaricom.

Thank you. First, hopefully, you've got a taste of what the new growth areas look like in Safaricom, integrated propositions, secure connection be the underpinning and the business outcomes that can be derived in these -- as a result of these investments. I thank you very much. I just wanted to make one final note. Isn't it amazing to see all these women and technology up here. Right about that. I will now hand over to Martin, who will go over the technology experiential boots. Thank you, and we'll be available for questions throughout the day. Thank you so much.

Thank you, [indiscernible]. So the first thing we'll talk about is our little baby that you can see up here with is our solar program. Paul here, he's leading our data center and our energy program, and he will take us a little bit through how it works and what are the benefits we're seeing for it. So over to you, Paul.

My name is Paul [indiscernible] and I'm in data center and energy management. So what you showcasing here is a very aggressive program on energy modernization and energy efficiency. So last year, for about 12 months now, we've been able to execute about 1,400 solar sites across the network. And also that includes modernizing our network with lithium-ion batteries and smart rectifiers. So typically, when you work into normal supply from site now, you try and find such a structure which you have solar. This is over and above the normal utility and the most undesirable generator. So in the same modernization, we have rectifier, this is an outdoor rectifier that actually charges the batteries, and it has the intelligence to only charge the batteries using solar. So the configuration that we have is that we never charge these batteries, which are lithium-ion [indiscernible]. Lithium has an advantage over the previously used lead acid that you can actually extract 80% of the stored energy. So the biggest impact that we've seen in this and is that from last year, we've been able to save about 860 tonnes of carbon because of avoidance of banning diesel. And that actually speaks into our net 0 carbon agenda. We've also been able to create jobs directly through our partners. We've had about 500 jobs in [indiscernible] 1000. What we've done in the training also is to actually bring in a more concept about health and safety because if we recruited this project without any incident, actually 0 harm. This also has an impact every other month in our network. We have about 9 million customers that are impacted the report related incidences. So when you modernize and put in solar, you actually are almost not likely to have a power outage, and we have seen a 0.5% to network availability. That also speaks to our customer delivery and that was to improve the NPS. And then finally, obviously, the SDG goals that we are true to meet. Maybe you can go live to our solar sites that we have more than 8. This is a solar site that is in Eastern region. So what you have here is the blue line represents the load of the side, that's how much energy it's drawing. So through the night, we see we have a deep grid. The batch was actually sustaining it. and very early in the morning of around 7, the grid kicked in before Solar was able to run. And the intelligence of the rectifies shows the grid only kicks in for maybe an hour or less. And when solar is efficient, we drop the grid and actually can run the whole day on solar, the light grid is actually solar as well as charging the batteries and carrying the load and actually through the whole day and achieving when the site is actually, you probably can have a live mission in terms of now. This was yesterday. Maybe we can go today. Yes. So yes -- so today, which is on 15. We see, again, the site is running on battery through the night. And today, we were able not to call the activities, so meaning you sit [indiscernible] and then the solar is charging the battery. The ambition we have here is actually to go off-grid. It's not just getting up the generator, but ambition is actually to go off-grid. I'd like to show one more site. This site is in a region in coast, this borders with Somalia it's the Boni forest. It's very insecure. And we have a number of terrorist attacks on our towers. So what you do here is that this place was entirely on generator. And because you have enough space, you've been able to do 100% solar. And again, you can see through the night, we were 100% on battery and the sun is able to kick in and actually carry the load. So the mission we have is actually become is to go 100% off grid as we -- but okay, I think you have actually had a substantial close on the generators because the intention is to have 20% of our site to roughly be green. Thank you.

Thank you, Paul. So this is just one thing. We're also having a number of initiatives to manage our energy. So for example, during the night, we shot parts of the site down because there's fewer users on it. And we're also seeing with what's happening globally that all our vendors are now very, very focused on getting out with more energy-efficient solutions. So thank you, Paul. Let's move on to the next one here. This is a new system, we just developed and put in place. And it's about getting more insight to both our customers real time customer experience and when they interact with Safaricom, the quality of experience. But as we will see here, there's a number of data points now we can use to give an even more personalized experience. And we'll talk about that after this presentation. So Faith, over to you.

Thank you, Martin. Hi, everyone. My name is Faith, from technology. I'll be taking you through the Smart care solution which is a solution that gives visibility and we have recent visibility to the customer and service experience. And today, I'll be focusing on the experience of one. So previously, we have focused on meter performance as opposed to the customer experience. And I think I would have customer calling customer care, and we don't have to answer for many questions for us to be able to have an idea of exactly the experience they are going through. So with the Smart care solution, they would go customer care in -- as one view. We are about to sell exactly the pain of experience they're going through for data service, SMS, voice and even on the fixed home. So on the screen, I have one of our customers, and I'll be looking at their data service for the sake of this presentation. You see at a glance, I'm going to see details of somebody's -- this customer, the device they are using, the capabilities of their device, what exactly they are doing on [indiscernible]. So if you focus at the top left, you can see if there is any issue that this customer would have in as a [indiscernible] or be able to tell, that's actually from this category, it will be [indiscernible] or rent, depending on the kind of degradation of the experiencing. So from Atlante, I'm going to tell that kind of experience. And I'll even get a suggestion on how to result some of the issues. This, we are enable in the frontline -- the frontline agents who receive calls directly from customers. So that to proactively receive -- proactively resolve customer issues on the flash [indiscernible] to call them back. I think the [indiscernible] will actually call you back so that they can go and say same information about whatever challenge they are having. So if you look at the overall policy, I'm about to see that for this [indiscernible], they're actually having a good experience for data services, for web browsing, for streaming, the experience is okay. On the right, I'm most able to see the kind of applications that they interacting with and the experience that they are having. If say, this customer had a very good experience on every other team except Facebook, then Facebook will have an alarm. If you -- on the next view on the historical view, I'm not going to get used analysis for this customer to see the times that they are very silent on our network and they tend to let the active on the network. And maybe just to highlight that this is important because if we are doing our personalized product for this customer, they would want to push this product to them at the time of the day when they are stuck. If you scroll further down, this is just a geographical representation of the sites that I have in this customer. If say that the experience of the customer be graded, and we note the site that is [indiscernible] them whatever -- the one was in the issue, then we'll have an anemometer and now we'll be able to drill down and resolve the issue. So beyond just the customer experience of our customers, we are so able to get a lot of insights about our customers. And what we aim to do is to make data-driven decisions would want to customize the products to a customer based on their trends, based on their behavior. For example, you look at this customer. If I was to sort whatever data I have to discuss models on the duration, they spend on the different applications. Then I can clearly see that this customer is very heavy on Facebook, we're browsing and teams, metastases spares. So if the business was to customize the product for this customer, it was created based on the applications that the access, then Facebook will actually be a good application product to push to this customer. So Smart care really has been an enabler and it's been an enabler for us to deliver a superior customer experience, which is part of our mission. And so with all this data, we invest is to be the big data platform. So a big data platform able to model products based on this customer. They to model the consumer behavior, the consumer trend. So that we'll be able to push to them products that are very relevant to them in near real time.

Thank you, Fred. So as I said, these are there some data points. We know about our customers. And all this is fed into our bigger big data platform. So we'll go and visit Sharath, who runs our Big Data team.

Thanks very much, Martin. It's our bit data to welcome the investor community in our group. And allow me [indiscernible] to just keep our focus on the big screen for 90 seconds intro on what we do for Safaricom as a Big Data team. [Presentation]

Thank you. Thank you very much. We will now going to take you through one use case that we are very much passionate about. And why we passed about it is because of what it does to our customers. We've got a network and we need to collect that customer. So this one particular use case, it will show a case now using big data to make sure that each and every customer who needs to be connected, who needs to enable to do so at an affordable price, but the price that is profitable to the organization. What you also see is the conversion rate because this offers are so catalyzed. They look at where you at a point in time, what resources you need based on your usual trends and we're able to find the right price points, the right price and big-sized resource that you're going to need. So my colleague is going to take you through at the back end, what is really happening and you show you through real time, how we're able to actually give those presentations to customers in during the over 40% conversion rate in this office. Over to you.

So we've with all the technology and capability of building all these offers that we have. We have a very great opportunity to help the customer or to give the customer the right contextual and customized offer at any given time. So you can think of it as the moment a customer has no balance as an example, and they cannot grow us because they have low balance. We are -- at that very given point, we're able to give them the correct offer say, they're actually looking for without them going into a menu and start looking for that product offer. And how that happens is with the capabilities again that we have systems like Smart Care and Customer 360, we're able -- we collect 5000-plus data points. And we analyze this and look at trends of the customers, and we use machine learning. What basically, machine learning does is instead of doing it the traditional where you have to go through an Excel and do things manually. We have automated algorithms that we build. And as you can look at this, all these samples of offers and each and every offer has a model. So in this use case, we have close to 43 models that are running live and this is a real-time instance of what is happening. So if you look at it at this very moment as we speak, this -- we've [indiscernible] around 251 offers to the customers and the ones that they bought around 152. We monitor every -- in real time and at every given point.

Awesome. Why is this powerful is that, like I said, every single customer deserves to be protected to our network. And this particular use case focuses on those customers who cannot afford bigger bundles, but needs to stay connected. As you can see, some of them is for 24 hours -- an hour. But at the back end, the model enables us to actually ensure that even in the way that you offer them, we don't affect negatively our network nor do we offer a complete discount and therefore diluting our base. Now the next one use case is actually a very interesting one. Now in the spirit of digital in facility, our customers people they engage with us. They always have queries. They always have things they need to ask us about the sales that we provide to them. We feel the team has built to be a very interesting language model that not only serves people who can speak English, but serves who can speak Swahili in [indiscernible]. And we went to as one of our investors actually to help us test this model and we are vulnerable, right? We believe that the model will work. And therefore, we're going to do that test. You're going to give us a query that you will put it on here, and you'll see how we're enabling our chat bot to be that intuitive and able to actually respond to customers across the language spectrum. You can come to my friend.

[Foreign Language]

That's quite a test, okay? Let's see what -- how intuitive this incredible language model is in making sure that.

That's an [indiscernible] problem -- and you can see that's an [indiscernible] problem. And you can see the confidence is very, very high, meaning it really understand. So I don't know if anyone else -- I speak a little bit of Sheng, so I'll put.

So I think for those who could not hear [indiscernible]. Based on what he said, the model can pick up there. This is an impact reversal query and predicting that at 95% accuracy. So that's how powerful now you're able in zuri to actually have intuitive conversation and not guessing what the customer is trying to ask for.

Again, another [indiscernible] query, but this is [indiscernible]. So this basically means I send money to the wrong person. That's what you said. So I just wanted to flow with that. But in Sheng. [Foreign Language]. So most words are changed in a pure English, pure Swahili or pure Sheng like one language. But what we've done here is we will introduce some complexity to make the model much lingual. So whatever language you speak -- And the reason why we go in Sheng, English or Swahili is because those are the 3 major languages that our customers speak. So for inclusivity, we want to make sure if a customer speak Sheng, English or Swahili they're able to [indiscernible] perfectly.

Thanks very much, Gian for that. You talked about in [indiscernible], but it's also about us running a very lean business. So here, we were able to leverage the power of technology and AI to actually serve a customer and elevate speed. Thank you very much. We invite you for more questions or if you wish, after lunch, but thanks for the opportunity to share with you what we do. If you have any questions, you can free to ask them. Thank you.

Thank you very much, Morten and Cynthia and your teams. I say thank, I would expect something. Very good. So just a few housekeeping rules. We will have a lunch break now this is the second part of our morning presentation, which now concluded. We'll have a lunch break, and we all come back here at 1:55 East Africa time. 1:55 East Africa time. And I also want to announce that after the last presentation and our Q&A session, as we proceed to the speed networking place, we'll have a group photograph. Please, please make yourself available and that photograph of for rail with us outside this room here on the field. Now just one important thing that I didn't want to -- I don't want to miss. We haven't spoken a lot about this area. If you see this, there are people who are putting a lot of efforts in telling the stories. And we did not have a presentation from them. But I know just to give you a clue, these 3 part, these 3 boots actually contribute almost 50% of our business today, yes. So please make yourself available. They're available for the similar conversations that you had for the live patients and the demonstration that we have seen, I think you'd also get inspiration because mobile devices are our growth engine, fixed is our growth engine and voice is still a very important franchise in our business today. So with that, please proceed for the lunch and enjoy your lunch. I know that same place. that's outside this room, yes, if we go to the same place. We come back here for 1:55 chat. [Break]