Details of How Michael Joseph Built the Safaricom Empire

By Jackson Okoth

Michael Joseph, the Chairman of the Kenya Airways (KQ) Board of Directors and formerly the CEO and Chairman of Safaricom Plc, can be considered one of the top leaders in Kenya’s fiercely competitive corporate landscape.

This is a perch that has never been occupied by anyone else – a highly prized and coveted position of heading the most profitable company in Kenya and the East African region.

But what makes the Safaricom story all the more remarkable is that it was once a rusty and moribund department within the defunct Kenya Posts and Telecommunications Corporation (KP&TC).

Financial Fortune Media takes a trip down memory lane with Michael, retracing the origins of the company, the pivotal decisions made, and its evolution into a colossus, weaned off its parent company, KP&TC.

The beginning

More than a decade ago, then, a state-owned KPTC began an intense search for a technical strategic partner to take over its moribund analogue mobile phone service.

The process persisted until May 2000, when Vodafone Group Plc, a mobile network operator headquartered in Newbury, Berkshire, England, showed up.

The transnational immediately pumped in a cash injection of US$20 million into an outdated and congested network, which had struck out as a malignant tumor on the foot of a dying parastatal.

During this period, the analogue mobile phone service, which had just acquired GSM, was operating in Nairobi and Eldoret. It had only rolled out a paltry 11 base stations in Nairobi and 5 in Mombasa, offering a highly overpriced service to those who could afford it.

What Michael inherited and used as his building blocks was a company offering a damn expensive but poor-quality product, fraught with long queues of angry subscribers.

“It was damn expensive to get a mobile phone and use one if you could use it. There was also a low-quality customer service, with subscribers queuing to pay their bills. Sometimes one gets a bill and sometimes not. It was not a very great service. It was almost a service put together on a shoestring,” recalls MJ, as he’s fondly known in the Corporate world.

Michael arrived in Kenya in June 2000, landing in Nairobi with a team of five people from Vodafone, with a mission to resuscitate Safaricom.

“We inherited a poor network and not very happy customers. Our immediate target was how to relaunch this company. We only had US$20 million, which Vodafone had originally put into the company,” said Michael.

The Safaricom boss mentions further that while it was expected that KPTC was to chip in, all he did, he says, was to provide its rusty network and the subscriber base.

Also acting against the company was its competitor Kencell (which has changed its name multiple times), which at the time of inception, had already been awarded the second mobile phone operator license in February of 2000. It was already off the starting blocks and was ready to launch its service in August of 2000.

Kencell was a Kenyan mobile telecommunications company that operated from 2000 to 2004 and was the precursor to Airtel Kenya. It was founded as a joint venture by Vivendi and Sameer Group and was known for its market leadership in Kenya before Vivendi exited the company. Kencell then became Celtel, and later Zain, before being acquired and rebranded as Airtel Kenya in 2010.

Kencell, at the time, had a brand new and bigger network, which in turn presented a substantive challenge for the technicians and Vodafone engineers at Safaricom.

Safaricom, on the other side, had about 17,000 subscribers when Joseph and his team came on board.

“This is the number that I inherited. I never got to know what the company’s turnover was then, but it was tiny. Given that each subscriber was spending about Ksh 5000 per month, this indicates what the revenues were back then,” narrated Joseph when I sat down with him.

It was against this background that Michael began the job of piecing together an outfit, finding all the missing parts, dismantling the entire ecosystem that existed at the time, and putting it back together, with a competitor breathing down his neck.

“The agreement was that we would take over all the Safaricom employees of about 55 people. In July, 55 people came over from Telkom. We then awarded a contract to Siemens for the infrastructure upgrade, setting up the platforms and the pre-paid billing system,” said Michael.

The building blocks

Moving into the ground floor of Norfolk Towers, Michael and his team of 5 employees rolled up their sleeves and first began by reconstructing the offices.

The next business was to begin rebuilding the network by adding new base stations and sprucing up the billing system, establishing a fully-fledged and 24/7 customer care facility that would be able to handle the restless 17,000 dissatisfied subscribers and a skeptical public, with no mobile telephony culture.

The team then moved to put together a customer-friendly marketing team, as well as drawing elaborate sales plans and designs for the network.

Michael and his team had to work day and night for the rest of that year, their adrenaline pumping and with a mission in mind.

To relaunch the network, just in time, to pull the carpet off the feet of Kencell, which had over 85,000 subscribers and was already making inroads into the unexplored and virgin mobile telephony market in Kenya.

“On October 20th of 2000, we relaunched the network, which brought everybody over to the new system. We began to sell our new phones with a new pricing model, which was all prepaid, he says. Safaricom still had its 17,000 subscribers.

“By the time I got here, the price of a handset was going for between KShs 100,000 and KShs 120,000. We sold the first handsets we brought in for KShs 8000,” he remembers.

During this time, Safaricom was up against meeting the expectations of an already existing customer base, composed of individuals and corporates, who were expected to come onto the new network without the migration having any hitches.

The company had to provide uninterrupted service and overcome quality problems and congestion that were rampant in the network before the entry of the Joseph team. Previously, there were instances when one could not make a call the whole day on the network.

Among the first critical departments that were set up were customer care, the human resource department, engineering, technical, and then sales and marketing. “These were the key departments we set up immediately at that time,” said Michael.

His team also had to make key decisions on the direction the company was going to take, considering that it was beginning from a disadvantaged position in many respects.

“The very first decisions included launching a prepaid, not a postpaid billing system. It means we had to get a pre-paid billing system in place as well as scratch cards.

I believed that our target market would be the ordinary man on the street and not the one with the credit card.

So, we started with prepaid. We had to decide how we were going to bill. We decided we were going to bill per second, which was an important decision, given that we were starting with no money. Billing per minute gives you 20-25 times more revenue than billing per second. In those days in Kenya, not many people understood this,” he explains.

“The next decision was to build a strong customer service component, which would be free and available 24 hours a day. We also made the decision to introduce low-cost handsets into the market.

These were the key decisions that formed the foundations of this company, which later became the basis of our ultimate success. Although it took time for the market to understand that the per-second billing was a much better proposition than per-minute billing, it eventually turned out to be the right decision,” says Michael.

The relaunched network, however, experienced a slight setback, with serious technical problems at the initial stages, forcing Safaricom to upgrade the equipment very quickly.

There was also the ever-present presence of a respectable competitor, who equally had a good network and the cash flow to match. Safaricom had to deal with the teething problems posed by the old equipment it had inherited. It had to build on what it had, as opposed to the competitor, which had the luxury of spending US$100 million on a brand-new network.

“All we had was US$20 million, which had to pay for the new network, salaries, and customer care shops. We had very little revenue then,” says MJ.

In comparison to what he found in Kenya and at Safaricom, in Hungary, which was his last posting before moving here, the start-up he built there was the third mobile phone operator. It was started five years after the initial two operators had begun operations.

Further, Hungary had an existing and successful culture of mobile phone telephony. It took this Hungarian company six months to build a new network, boosted by shareholders who had deep pockets.

“In Kenya, we only had US$20 million; the market was predominantly made up of prepaid customers. I learnt a lot of lessons in Hungary that I have found applicable here,” said Michael.

Contrary to what sceptics, cynics, and those who were ready to cast stones say, it took Safaricom only six months to relaunch. By July 2001, it zoomed past its competitor, leaving a cloud of dust that has yet to settle down to date.

Seven years later, Safaricom had made inroads into the mobile telephony business and was outgrowing the business of Telkom Kenya and Postal Corporation, the two other siblings that came from the womb of KP&TC.

While Safaricom has grown into a giant, its rival firms have continued to bear the brunt of its expansive network and a well-oiled marketing machinery, second to none, especially Telkom Kenya and the now moribund Postal Corporation of Kenya.

Prospects

Today, Safaricom has maintained its high-octane growth momentum and shows no signs of relinquishing its top-drawer position, at the apex of Kenya’s corporate heap.

Safaricom’s subscriber count recently crossed 50 million mobile subscribers in Kenya, a milestone celebrated in July 2025 and marking a significant achievement for the company.

The network’s machine is still turbo-charged and is aiming to increase its penetration levels. Analysts contend that it is difficult to predict where Safaricom’s future growth will be.

But given its dominance and a better understanding of this market, the sky is definitely no limit in terms of increasing its penetration and product offerings.

The growth rate of mobile phone subscribers has not slowed yet. This means that Safaricom’s expansion has not reached its apex.

Technology upgrade

In a bid to meet the spectrum challenges facing it, Safaricom has been upgrading its network constantly, including testing a 5G network. It has also upgraded the M-Pesa network to provide more offerings to partners and subscribers.

While it was expected that Safaricom had reached its peak and was on the downward slope, this does not seem to be about to happen. It remains to be seen whether Safaricom will keep its foot on the accelerator pedal.

Financials

Safaricom reported a 15.07% revenue growth to KShs 189.42 billion in H1 2025, driven by M-PESA, mobile data, and fixed data revenue. M-Pesa revenue growth was up 15.2%, contributing 61% of incremental revenue growth with 37.2 billion transactions and KShs 38.3 trillion in value. Safaricom now has over 37.1 million subscribers, from 17,000 when Michael came on board.