What you need to know:
- Safaricom suffered outages between 9:40am and 4:30pm in a disruption the firm attributed to “a failure on both our core network as well as our redundancy options”.
- Calculations by the Business Daily indicate that Safaricom could have lost out on M-Pesa transactions worth as much as Sh2.6 billion during the outage.
- Multiple banks have hooked up their systems to M-Pesa and KCB, for instance, warned customers about “network challenges”.
Kenya’s largest telecom operator Safaricom could be facing stiff penalties after an outage left millions of customers in a communication blackout on Monday.
The network suffered outages between 9:40am and 4:30pm in a disruption the firm attributed to “a failure on both our core network as well as our redundancy options”.
Thousands of Kenyans who are hooked to M-Pesa services were the most affected, with hundreds unable to pay for their shopping and meals as well as remit wages to workers.
Others experienced difficulties calling, sending and receiving text messages or using data services.
“… we lost connectivity into our core network as well as the redundant path. This shouldn’t happen. It is unusual that both the redundant and the main path failed,” said Safaricom chief executive Bob Collymore in a statement in which he also apologised to customers.
RESOLVE THE ISSUE
“Our team worked as quickly as possible to resolve the issue and invoked our business continuity planning protocol to restore services and the incident was marked as closed at 4:30pm.
At present, most voice, data, SMS, M-Pesa and enterprise services are available. We wish to assure our customers that their balances and the integrity of our system are intact,” he added.
Calculations by the Business Daily indicate that Safaricom could have lost out on M-Pesa transactions worth as much as Sh2.6 billion during the outage, while the ripple effect on the rest of the economy are expected to be significant.
“We’ve barely done any business today. It’s been so quiet,” said Ms Patricia Kamuya, who runs an M-Pesa agency on Nairobi’s Moi Avenue.
Communication Authority of Kenya (CA) statistics show that about Sh3.3 trillion was moved through M-Pesa in the year to December 2016, translating to an average of Sh9 billion a day or about Sh376.7 million every hour.
This means that between 9:30am and 4:30pm, Safaricom could have lost out on as much as Sh2.6 billion worth of transactions.
With 27.7 million customers, which is 71.2 per cent of the market share, Safaricom is the largest telco in Kenya and a significant player in financial services through its M-Pesa platform. Yesterday’s outage had a domino-effect on the economy, bringing to fruition a worst-case scenario that was outlined by the National Treasury last year.
Multiple banks have hooked up their systems to M-Pesa and KCB, for instance, warned customers about “network challenges”.
During the outage, Safaricom customers struggled to pay their electricity bills, shop, pay court fines, send money to relatives, and even place their bets with gambling firms.
Last year, the National Treasury classed a technological disaster in the M-Pesa dominated mobile money sector as a potential fiscal risk.
In its Budget Policy Statement, the Treasury said that an M-Pesa blackout could cost the government “substantial” losses in corporate tax revenue.
CA said that unless the shutdown was caused by an “act of God,” the telecommunication firm will be punished. Director-General Francis Wangusi said the regulator does not tolerate downtimes of more than one hour.
Mr Wangusi said his organisation had also been in a “communication blackout,” forced to “physically” send people to Safaricom just to get an idea of the cause of the outage.
This points to the reliance, even within the government, on Safaricom services.
“I would want to say that those are the risks of probably having too much dominance in the market by a few players or so, because you don’t spread the risk,” said Mr Wangusi.
The outage comes in an election year when Kenyans are increasingly jittery about the reliability and privacy of messages they send via telecommunication networks.