Safaricom is targeting to sell a million 4G-enabled smartphones through a Sh20 a day hire purchase device instalment plan in partnership with Google.
The telco, which launched the scheme on Tuesday, said it will give priority to customers currently on the 2G network, as it moves to increase internet access among the low-income segments of the population.
To own the phone under the Lipa Mdogo Mdogo scheme, one will give a down payment of Sh1,000 and then pay daily instalments of Sh20 for about nine months.
Google developed the Neon Ray Pro, a 4G Android (Go edition) smartphone, which will be distributed through the Safaricom retail shops. The internet giant will switch off customers who default on paying the daily Sh20.
The phone currently retails at about Sh6,000 for cash buyers but under the scheme, it will cost about Sh500 more by the time a customer finishes payments.
"Smartphones in the hands of our customers possess life-transforming possibilities. They open a new world. We aim to take that world into the hands of every consumer through affordable means," Safaricom Chief Executive Officer Peter Ndegwa said as he marked his first 100 days in office.
Ms Mariam Abdullahi, the Director, Android and Platforms Partnerships at Google, said Android's goal has always been to bring the power of computing to everyone.
"Access to the opportunities the internet offers is critical for any nations' economic growth and social inclusion. We believe this collaboration will bring more Kenyans online and help them take advantage of the opportunities that exist online," Ms Abdullahi said.
To participate, customers need to dial *544# and accept the terms and conditions to opt into the service, after which they will receive an SMS approval of their eligibility and the value of the device they can purchase under the service.
Eligibility for the financing plan will be based on customer credit score. The subscriber must have a history with the Safaricom network of at least one year and be between 18 and 75 years of age.
Mr Ndegwa noted that the launch of Lipa Mdogo Mdogo came just within days of his 100 days as CEO.
"One of the things I set out to do when I took up this job was to democratise data by delivering affordable devices. Today is the first step towards this commitment," he said.
"In addition, Lipa Mdogo Mdogo will help in bridging the digital divide by building a significant penetration of 4G handsets and internet usage in the country," he added.
Safaricom said the Communications Authority of Kenya estimates mobile penetration at 116.1 per cent, but within its customer base, smartphone penetration was only at 42 percent.
"Specifically, 4G handsets penetration is only at 16.8 percent. This presents an opportunity for Lipa Mdogo Mdogo," Mr Ndegwa said.
In the last financial year, Safaricom invested over Sh 36 billion in its network. It boasts a 4G coverage of more than 77 percent of the population and a 3G coverage of 94 percent.