NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Tuesday, July 8, 2014

Kenya: The black swan theory provides an interesting way of looking at the business world. But for many entrepreneurs and corporate leaders, this theory — which describes an event that comes as a surprise and has a major effect — is yet to be ingrained in their way of life. And this is despite the fact that innovations that turn the world of business upside down often, if not always, come from “unexpected” quarters.

A black swan has landed into the Kenyan telecommunications market in the form of Equity Bank’s planned roll out of Thin SIM technology through its wholly owned subsidiary Finserve Africa.

What Equity Bank is planning to disrupt and dismantle is the dominance Safaricom has built in the mobile money transfer sector with M-Pesa, and the stranglehold it has in the telecommunications market. Many thought Safaricom’s lead in mobile money transfer services would be unassailable. Even the telco’s direct competitors in the industry — Airtel, yuMobile and Orange — have been unable to dent the firm’s dominance.

And going by a series of letters in Business Beat’s possession that were exchanged between the telco, Finserve and industry regulators, Safaricom CEO Bob Collymore is determined to defend his turf against an invasion by Equity.