Safaricom Profits have largely come from mobile money and data
Safaricom profits are up by 38% after tax to Kshs 31.9bn in the year ended 31st March 2015 in what was influenced by the diversified use of Mobile money platform M-Pesa and data.
The company’s revenue has grown by 13% to Kshs 163.4bn in the mobile industry whose penetration now stands at 80.6% with safaricom recording the largest subscriber share of 67.4%. as the number of individuals moving out of the service dropping by 17.3% following the company’s effort to retain and reward loyal customers in consumer propositions and promotions.
Amid tremendous growth of mobile money and data in the ended year, voice services also grew by 4% to Kshs 87.4bn. The growth was inspired by the company’s loyal customer base attracted by a superior network experience, convenient airtime distribution and promotions such as the ‘Tetemesha’ campaign.
‘Bonyeza ushinde’ under the messaging sector also contributed to the increase of messaging revenue by 15% to Kshs 15bn which represents 10% of the total revenue. Affordable SMS bundles was also a factor that contributed to the growth of the non-voice service product.
M-Pesa, now contributing 20% of total revenue, continues to be a significant driving factor in our growth. This was driven by a 14% increase in 30 day active M-Pesa customers to 13.9m as well as an increase in the average number of transactions per customer. In the year, Safaricom expanded our M-Pesa agent outlets to 85,756 thereby promoting accessibility of the service to our customers. Since its launch, the Lipa na MPesa service has enabled cashless merchant payments and facilitated trade between businesses and their customers while improving business efficiency. In March 2015 the service had 49,413 merchants active on a 30 day basis, who received Kshs 11.6bn of payments.
Mobile data revenue grew at an impressive 59% driven by an increased uptake of affordable data bundles and a 21% growth in 30 day active mobile data customers to 11.6m. By 31 March 2015 the telco had 4.3m customers on 3G enabled devices of which 3.4m were smartphones. Fixed data revenue increased by 22% to Kshs 3.1bn on the back of 23% growth in fixed data customers.
The company has pledged to continue with its program; ‘Best Network in Kenya’ in an investment worth 33.7bn on capital expenditure during the year with a goal to provide the best customer experience through improving network quality, capacity and coverage.
The company’s coverage stands at 69% 3G network, 92% 2G network and 30% fibre connection. Free cash flow has seen an increase of 21% to Kshs 27.5bn. The flow was however negatively impacted by the National Police Security in the year by 1.1bn with an expectation of the negative impact to go upto Ksh5.9bn.
Home broadband investment
Safaricom has announced the launch of a set-top-box that brings the 3G and 4G network into the home. The gadget is also designed to distribute the superfast connectivity via Wi-Fi to any existing Wi-Fi enabled devices. ‘The box’ will also offer free-to-air TV channels to customers’ TV with the company promising a wider range of relevant content and Video-on-demand in the coming year.
Among other strategies underway is maximization of M-Pesa through Lipa na M-Pesa in a bid to make a significant contribution to the lives of customers in a journey towards a cash-lite economy.