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Safaricom partnership with local startups improves

Rebecca Wanjiku | July 12, 2013
Business practice changes by local startups have helped.

"Tangazoletu started this partnership with Safaricom three years ago, over time we have established various synergies, our strategies and objectives had to be aligned in order to provide cutting edge solutions for the consumption of the market which has helped differentiate our offering in the market," said Gathingu.

Intellectual property issues in the ICT sector have been challenging, with people wondering who owns the IP once the product enters the market. This was one on the problems cited by the developer community, where they would share their ideas which were then rejected, but the same idea would be implemented with a partner that had more financial muscle.

Safaricom came up with a model of revenue sharing so that if a developer comes up with an innovative idea using existing Safaricom infrastructure the IP belongs to Safaricom. Another model is where an application or service is developed and only uses Safaricom services the IP belongs to the developer.

"The challenge for both Safaricom and the startups is how to share the intellectual property or develop a monetary model that makes both the developers and Safaricom happy," added Hersman.

While Gathingu said that IP ownership is important, he insisted that a company that wants to make money and provide employment and innovation opportunities should take advantage of Safaricom's existing country-wide infrastructure and not be bogged down by concerns over IP ownership.

It may be a good time for local developers, but it has not all been rosy. Some startups have problems delivering, others take a deposit and never deliver services, while others take on jobs only to realize that they cannot deliver.

"One of the key challenges revolves around business models. Through engagement with startups, Safaricom assists in guiding developers and the local startups to evolve their business models and also help provide different scopes through which their businesses and ideas can be brought into market," added Waita.

With the local developer community growing, there is optimism that Safaricom will continue opening up its infrastructure to more innovation. Huawei has already been awarded a contract to build a local Mpesa platform, which might provide further collaboration.

"There is still an opportunity for Safaricom to contribute greater to the community by opening up their infrastructure via APIs and let everyone jump on and make money. For instance, Mpesa has reached such a level that it can be agonistic and local tech community will find a way to increase revenues," said Hersman.


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