The CEO Who Inherited A Cash Machine And Chose To Rebuild It

Steve Biko Wafula

1 month ago

When Peter Ndegwa stepped into the Group CEO role at Safaricom PLC in April 2020, he did not inherit a struggling company. He inherited something far more complicated: East Africa’s most profitable corporate engine, a national utility in everything but name, and a brand whose commercial success had become deeply woven into Kenya’s social, financial and economic life.

That kind of inheritance can trap a leader. It tempts management to protect the old model, defend legacy revenues, and milk the machine until the market changes faster than the boardroom. Ndegwa’s mandate was therefore both simple and brutal: keep Safaricom’s Kenyan engine generating cash, while rewriting the company’s DNA from a voice-and-SMS telecommunications giant into a purpose-led, data-driven, regional technology platform.

Six years later, the numbers tell a story that is bigger than quarterly profit. Safaricom has crossed the KES 414.1 billion service-revenue line, delivered approximately KES 100 billion in group net income, deepened M-PESA into one of Africa’s most powerful digital-finance ecosystems, and forced its way into Ethiopia, one of the continent’s most difficult but most strategic telecoms markets. This is not merely corporate growth. It is strategic reinvention at continental scale.

Safaricom’s resilience was tested by the worst possible operating environment

The Peter Ndegwa era has not unfolded in calm waters. Safaricom has had to fight through pandemic-era disruptions, high inflation, foreign-exchange volatility, severe depreciation of regional currencies, regulatory interventions, pressure on consumer wallets, and the heavy start-up costs of Ethiopia. Any one of those shocks could have slowed the company. Combined, they could have exposed the weaknesses of a complacent incumbent.

Instead, Safaricom’s core engine absorbed the pressure and kept compounding. Its FY26 results show group service revenue of KES 414.1 billion, while group net income reached KES 99.7 billion, commonly rounded to the historic KES 100 billion mark. The Kenyan business remained the profit anchor, but the Group’s future increasingly became regional, digital and platform-led.

The most important lesson here is not that Safaricom made money. Safaricom has always made money. The lesson is that the company made money while funding one of Africa’s most ambitious greenfield telecoms expansions, while defending its domestic market, while absorbing regulatory pressure, and while shifting its revenue mix away from yesterday’s cash cows. That is the difference between profitability and strategic resilience.

M-PESA is no longer a product. It is Safaricom’s economic operating system

The most decisive transformation under Ndegwa has been the maturation of M-PESA. What began historically as a peer-to-peer money-transfer service has become a multi-sided digital financial platform touching consumers, merchants, banks, developers, micro-enterprises, corporates and governments. It is now less accurate to call M-PESA a product. It is Safaricom’s economic operating system.

In FY26, M-PESA revenue grew to KES 182.7 billion and accounted for 45.6% of Safaricom Kenya’s service revenue. Its scale is almost difficult to comprehend: tens of billions of transactions, trillions of shillings in value processed, and a daily role in how ordinary Kenyans pay, borrow, save, sell, receive, survive and grow.

This matters because the future of telecommunications is not voice. It is not even data alone. It is the ability to sit at the centre of daily digital behaviour. M-PESA gives Safaricom that centre. Every merchant payment, Fuliza interaction, bank-to-wallet transfer, Pochi transaction, bill payment and app-based service deepens the platform’s intelligence and commercial gravity.

The MSME economy became Safaricom’s second frontier

Safaricom’s strongest strategic move has been to understand that the next layer of growth sits inside Kenya’s informal and semi-formal enterprise economy. The mama mboga, kiosk owner, boda-boda operator, salonist, fundi, small wholesaler, online seller and micro-merchant are not peripheral users of technology. They are the economy’s operating layer.

Through Lipa na M-PESA, Pochi la Biashara and the Consumer and Business Super Apps, Safaricom has pushed deeper into the daily life of small businesses. The active merchant base has grown to about 3.1 million businesses, turning M-PESA from a consumer convenience into an MSME digitisation rail.

This is why the company’s decision to reduce Fuliza daily maintenance fees by 50% and lower transaction friction was not just public relations. It was defensive economics and social strategy combined. In an inflationary economy, protecting transaction velocity protects the ecosystem. If small businesses stop moving money, everyone loses: merchants, customers, lenders, suppliers, government and Safaricom itself.

Ethiopia: the expensive bet that may define the next decade

If M-PESA is the heart of Safaricom’s platform strategy, Ethiopia is the boldest expression of its regional ambition. The entry into Ethiopia broke a decades-long state monopoly and placed Safaricom inside one of Africa’s largest, youngest and most underpenetrated markets. It was never going to be cheap. It was never going to be smooth. It was never going to deliver instant comfort to shareholders.

But strategic markets are rarely easy markets. Safaricom Ethiopia has moved with speed, building more than 3,500 active network sites, reaching over 13.6 million customers and covering roughly 60% of the Ethiopian population. The award of the mobile financial services licence by the National Bank of Ethiopia then opened the more important long-term door: M-PESA Ethiopia.

The early years have carried heavy capital expenditure, foreign-exchange pain, and start-up losses. Yet the trend now matters more than the pain. Ethiopia’s losses have narrowed sharply, service revenue has accelerated, customer acquisition has strengthened, and M-PESA adoption has created the foundation for a second major digital-finance ecosystem. The question is no longer whether Ethiopia was expensive. It is whether Safaricom is building an asset that will look obvious in hindsight.

The deeper shift: voice has lost the throne

For years, African telcos were judged by voice revenues, airtime consumption, SMS volumes and subscriber counts. That era is ending. Safaricom’s FY26 journey confirms the new hierarchy: mobile data, digital finance, enterprise services, fixed connectivity, cloud, AI, analytics and ecosystem platforms are the future profit pools.

One of the clearest signals is that mobile data has overtaken voice as the largest contributor to connectivity revenue in Kenya. That is not a small accounting event. It is a structural signal. Customers are no longer buying a telco line merely to talk. They are buying access to work, entertainment, commerce, learning, banking, government services, community and identity.

Safaricom’s expansion of 5G, its investment in 4G coverage, its use of more than 70 machine-learning and AI models, and its push into customer-value management show a company trying to become predictive rather than reactive. The future telco will not simply sell bundles. It will anticipate behaviour, price intelligently, personalise offers, reduce churn, power businesses and mediate digital life.

The Ndegwa playbook: defend the core, build the platform, diversify the geography

The strategic architecture of the Ndegwa era can be reduced to three moves. First, defend the Kenyan cash engine by improving execution, protecting margins and deepening customer engagement. Second, transform M-PESA from a transaction rail into a full economic platform. Third, diversify geographically through Ethiopia, accepting short-term pressure for long-term optionality.

That is a difficult balance. Too much focus on Kenya would have left Safaricom exposed to market maturity and regulatory pressure. Too much focus on Ethiopia would have weakened the profit engine that funds the Group. Too much focus on financial services would have risked neglecting network quality. Too much focus on network quality alone would have left value on the table. The achievement of the last six years is that Safaricom has tried to do all of these at once — and largely kept the numbers moving in the right direction.

For business leaders, the lesson is clear: transformation is not a slogan. It is capital allocation under pressure. It is choosing where to absorb pain. It is funding tomorrow without destroying today. It is understanding that legacy strength can become legacy weakness if leadership refuses to evolve.

Why this matters beyond Safaricom

Safaricom is not just another listed company on the Nairobi Securities Exchange. Its scale makes it a national economic institution. Its payment rails influence household consumption. Its network quality affects enterprise productivity. Its dividends matter to pension funds, retail investors and the government. Its tax contribution matters to the exchequer. Its innovation choices shape the direction of Kenya’s digital economy.

That is why the company’s evolution must be studied carefully. When Safaricom moves from voice to data, it signals where consumer behaviour is going. When M-PESA grows, it signals the depth of informal-sector digitisation. When Ethiopia losses narrow, it signals the possible emergence of a second regional profit engine. When merchant numbers rise, it signals that small businesses are becoming traceable, bankable and digitally visible.

In that sense, Safaricom’s transformation is not only a corporate case study. It is a mirror of East Africa’s economic future: mobile-first, platform-led, data-rich, financially digitised and increasingly regional.

The verdict: Safaricom has outgrown the word ‘telco’

The Peter Ndegwa era marks a structural inflection point in Safaricom’s history. The company he inherited was already powerful. The company now emerging is broader, more regional, more data-led and more deeply embedded in the architecture of everyday economic life.

There are still risks. Ethiopia remains a high-stakes market. Currency volatility can distort performance. Regulation can compress margins. Consumer pressure can weaken transaction growth. Competition will intensify. But great companies are not defined by the absence of risk. They are defined by the quality of the bets they take, the discipline with which they execute, and the resilience of the systems they build.

On that measure, Safaricom’s journey under Ndegwa has become one of Africa’s most important corporate transformation stories. It is the story of a company that refused to remain a cash-rich voice business, chose to become a platform, entered a difficult new market, and is now positioning itself as a regional technology titan. The old Safaricom connected calls. The new Safaricom connects economies.