How Safaricom Used Towers and Agents to Dominate Telecoms and Mobile Money in Kenya — and Why It’s Eyeing the Energy Market using Smart Meters.

Safaricom Kenya used towers and agents to secure a monopoly position in telecom and mobile money. Now, it’s using smart meters to try dominate the energy sector in Tanzania, Nigeria and Kenya.

Introduction:
Safaricom, Kenya’s undisputed leader in telecommunications and mobile money, has reshaped the landscape of multiple industries with a strategic mastery that few can match. The company’s dominance is a result of leveraging its telecom towers and expansive mobile money agent network to establish an unassailable stronghold in both Kenya’s telecom and mobile financial sectors.

The key to Safaricom’s rise was its ownership of towers, which allowed the company to build an unstoppable lead in the market. This gave Safaricom a huge advantage, making it too expensive for any competitor to match its scale and service quality. As a result, Safaricom locked in its dominant position, leaving competitors struggling to catch up and ensuring it remained at the top of Kenya’s telecom market for years.

Then came the game-changer: M-Pesa’s agent network. What made M-Pesa successful wasn’t just its technology and the brand, but its vast network of agents—small businesses acting as mini bank branches. These agents allowed people across the country to easily deposit and withdraw money, even in the most remote areas. Today, almost 20 years later, M-Pesa still controls more than 95% of the market value, proving just how powerful the agent network was in building its success.

But Safaricom isn’t stopping there. The company is now taking on the energy sector with its Circle Gas affiliate and innovative products like Mgesi and KopaGas. These products are designed to provide clean, affordable cooking energy to millions of people in Kenya, Tanzania, and eventually, Nigeria and Asia. This is not just another business move—it’s part of Safaricom’s long history of changing industries. With new smart meters, Safaricom aims to provide sustainable energy solutions, transforming how millions of households across Africa cook, just like it did with telecom and mobile money.

Here’s how Safaricom has perfected its strategy and why its energy venture has the potential to be just as successful as its mobile money revolution.

1. A lot of Telecom Towers.

That is how Safaricom dominates telecommunications in Kenya, The backbone of Safaricom’s telecommunications success lies in and it came from its extensive network of telecom towers across the country. These towers were crucial in allowing Safaricom to dominate Kenya’s telecom market. At a time when other operators struggled to match Safaricom's reach, the company’s tower infrastructure enabled it to expand rapidly, particularly into underserved rural areas. Safaricom’s network coverage is so vast that it became the dominant telecom operator in Kenya, with minimal competition due to its infrastructure advantage.

In contrast, Tanzania took a different route. The Tanzanian government mandated that telecoms sell their towers to independent operators, allowing all companies to lease these towers rather than own them. This led to a more competitive market in Tanzania, with multiple telecom operators gaining market share. In Kenya, Safaricom’s monopoly persisted, giving it an advantage that is still evident today.

Somebody said: Look, Towers are a very efficient way to monopolise a market for telecom and mobile money, Let’s invest $10 billion and get another Kenya sized market in Ethiopia.

The company didn’t stop at Kenya’s borders. Safaricom expanded into Ethiopia, where it is investing at least $1.5 billion to build 5,000 towers over three years. This expansion into Ethiopia, with its massive population, has given Safaricom an opportunity to dominate a new market in East Africa.

2. A lot of Agents: The Heart of M-Pesa's Success

While Safaricom’s towers enabled its telecom dominance, it was the network of agents that transformed M-Pesa into a mobile money revolution. By leveraging a wide network of agents — local shopkeepers, community members, and small business owners — Safaricom made mobile money accessible to even the most remote regions of Kenya. This almost exclusive agent network was key to M-Pesa’s growth, as it provided in-person services transactions, making mobile money practical for millions.

M-Pesa dominates mobile money market with an overwhelming 97% market share, a clear monopoly by any definition. This "winner-takes-all" dominance has remained intact for many years, solidifying M-Pesa's and Safaricom position as the undisputed leader in the country's mobile money sector and telecommunications.

The convenience of widespread agents positioned M-Pesa as the go-to mobile payment solution in Kenya, and its influence put new players at a disadvantageous position. M-Pesa was not just a mobile money service; it became a cornerstone of financial inclusion, enabling millions of unbanked Kenyans to participate in the financial system. As M-Pesa grew, Safaricom expanded its services to include savings, insurance, and even business payments, further solidifying its dominant role.

3. A lot of Smart Meters: Safaricom’s Entry into the Energy Market

Having solidified its dominance in telecoms and financial services, Safaricom is now venturing into the energy sector, with a focus on clean cooking solutions. The company’s affiliate, Circle Gas, is built on the foundation of KopaGas, a Tanzanian startup that pioneered the pay-as-you-go (PAYG) model for liquefied petroleum gas (LPG) cooking. Circle Gas, through KopaGas and its Mgesi product, is addressing the growing need for sustainable, affordable cooking solutions in East Africa.

KopaGas: This product offers a pay-as-you-go LPG solution, allowing customers to purchase cooking gas in small installments. It’s designed for households that need affordable and flexible gas delivery. This model is vital for many families who traditionally rely on inefficient and costly methods for cooking fuel. By leveraging technology and mobile payments, KopaGas enables consumers to access clean cooking gas without the burden of upfront payments.

Mgesi: As part of Circle Gas, powered by KopaGas Tech, Mgesi provides smart metering technology for managing energy consumption and a brand in Kenya that resonates with Mpesa which processes their payments. With Mgesi’s real-time monitoring, Safaricom can track how much gas is being used, optimize delivery routes, and ensure that consumers only pay for what they use.

Together, KopaGas and Mgesi enable Safaricom to extend its influence beyond telecommunications and mobile money, positioning it to dominate the clean cooking energy market in East Africa. The company has already scaled the product to serve thousands of people in new markets like Tanzania, Kenya, Uganda, and Nigeria.

In many cases, monopolies try to downplay their market power to avoid regulatory scrutiny, but Safaricom doesn’t really try to hide it. They openly, proudly and happily dominate the Kenyan telecom and mobile money space.

4. Trying to replicate m-Pesa Success: Looking for another moonshot!

Safaricom’s expansion isn’t limited to telecoms, financial services, and energy. The company is also exploring other growth avenues. For example, its e-commerce platform, Masoko, launched in 2017, was initially meant to capitalize on the rise of online shopping in Africa. However, Safaricom is now refocusing (killing masoko) on partnerships with established players in the e-commerce space like Jumia.

Another project, Bonga, is Safaricom’s social media and messaging platform, which aims to combine messaging, payments, and social networking in one super-app. Inspired by WeChat in China, Bonga will enable users to chat, send money, and interact with businesses in a seamless platform, further strengthening Safaricom's position in the digital ecosystem.

Conclusion:

Safaricom's strategy to dominate key sectors such as telecoms, mobile money, and energy is based on its ability to leverage existing infrastructure and agents while expanding into new markets. With its innovative use of towers, agents, and now smart meters through KopaGas and Mgesi, Safaricom is not just a telecom operator — it is shaping the future of East Africa’s digital and energy landscapes. By diversifying into e-commerce, social media, and clean energy, Safaricom is creating a comprehensive playbook for market dominance that other businesses will undoubtedly look to emulate.

As Safaricom continues to grow, its success will likely hinge on its understanding of local needs, its ability to scale its technologies, and its commitment to innovation. With its upcoming projects, including Masoko and Bonga, as well as its expansion into the energy market, Safaricom is positioning itself to become one of Africa's most influential and diverse companies.

One Last Thing: What do you think of this article and the direction we have taken? What are your ideas that you would have added or comments on safaricom/Mpesa?