Safaricom: Kenya’s new smartphone plant could reduce prices by 30%


The factory, a joint venture between Safaricom, TeleOne, and Jamii Telkom, is aiming to produce the cheapest smartphones in Africa

A new smartphone manufacturing facility in Kenya is already making waves, with Safaricom’s CEO Peter Ndegwa suggesting locally built 4G smartphones could be up to 30% cheaper than their imported counterparts.

Speaking on an investor call back in November, Ndegwa said that most of the cost savings from building these phones domestically would be passed on directly to customers, with Safaricom not intending to make major profits from smartphone sales. Instead, he says, the operator will benefit from a more digitally enabled population further down the value chain.

“Our objective with local assembly is to hit price points that allow customers to afford those phones rather than start to make lots of money from assembling phones,” said Ndegwa in a newly published transcript from a call to investors in November. “Our expectation is not to make significant amounts of money on the actual device assembly, but to benefit customers downstream, and therefore increase our ability to monetise that through our existing business.”

The new factory, called East Africa Device Assembly Kenya Limited and built just outside of Nairobi, has an initial production capacity three million mobile phone units annually, a total that Ndgwa says could be tripled in future to meet demand.

The plant itself is the brainchild of Kenyan president William Ruto, who took office in September 2022 on a platform focussed largely on the country’s digital transformation, including the wider availability of digital devices at affordable prices. Part of this strategy included increasing domestic tech production, aiming to reduce the price of 4G smartphones to around $50 and below.

“We want to see if we can get it to Ksh.3,654 ($30) or Ksh.4,872 ($40),” said President Ruto, speaking in November 2022. “I want to promise the country that in the next 8 to 12 months we will have the cheapest smartphone in Africa, manufactured in Kenya.”

By May 2023, the Kenyan government had devised a formal plan alongside the nation’s telcos, who banded together to develop the factory as a joint venture.

It was launched officially in October last year, set to produce 1.2 million smartphones in its inaugural year.

The factory’s operations could not come at a more crucial time for Kenya. Imported smartphone prices have increased significantly over the last year as the result of new import tax laws combining with a crackdown on tax evasion. Smartphone shortages have become commonplace, driving up prices yet further as demand continues to climb.

Despite mobile phone usage being largely ubiquitous in Kenya, only around 60% of the population use 4G-capable smartphones, leaving enormous swathes of the population cut off from the digital economy.

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