Safaricom has just released its 2015/2016 full year financial report that indicates a shs 6 billion profit increase from shs 32 billion to shs 38 billion, which comes to around 19pc profit increase. At a time when every NSE listed company is making losses, this profit increase is very significant, but when compared to the previous year when Safaricom made a profit increase of shs 8.7 billion from shs 23.3 billion for the FY 2013/2014 to shs 32 billion for the FY 2014/2015, the shs 6 billion increase in Safaricom 2015 Profits recorded the last financial year is a deceleration on Profit Growth the company has enjoyed since the old good days of Micheal Joseph.
In the FY 2015/2016, Safaricom recorded an annual turnover of shs 195.7 billion up from shs 162 billion in the previous financial year. The bulk of the 2015/2016 revenues came from voice, data, SMS and MPESA services that accounted for shs 177.8 billion. The remaining shs 17.9 billion were from sales of mobile devices and infrastructural development (construction). By growth, data services experienced the largest growth at 42.7% netting in a revenue of shs 21.2 billion.
By growth, data services experienced the largest growth at 42.7% netting in a revenue of shs 21.2 billion. MPESA services that now records a daily transaction of shs 15 billion had a 27.2% growth rate which helped Safaricom get some shs 41.5 billion. Compared to growth on voice, MPESA is growing seven times as fast.
“Data remains our fastest growing revenue stream and we are focused on growing it further through accelerating smartphone penetration, growing 3G and 4G users, offering relevant content,” said the firm in a press statement.
The announcement that Safaricom 2015 Profits are in the range of shs 38.1 billion has not gone well with many Kenyans. Commenting on Twitter and news sites that have reported of the huge profits, Kenyans seem not to be able to justify how one company can make such huge profits in a third world country like Kenya.
Commenting on The Standard, Mkenya wrote, “All this being made by one company? Are you not taking advantage of the wananchi? Surely Safaricom can greatly reduce calling rates and still make profits. Taking into consideration the economy of Kenya, this is just plain robbery without violence!“.
Another commenter going by the handle darel letting also had this to say, “Just to make Airtel and company miserable..! I can imagine Collymore wagging his hands by his ears and flapping his toungue going “nyonyonyonyo” I think making certain amounts of net profit in a third-world country should be deemed illegal. This is self-evidential proof of theft/fleecing against the masses”.
On Twitter, most Kenyans expressed disappointments with the Safaricom 2015 Profits, with some calling on Safaricom to reduce their voice charges, reasoning that if they can make the huge profits at the current rates, then the telco can still make meaningful profits at reduced voice chargers. This reasoning can be said to be far-fetched since if one were to reason based on the chart provided by Safaricom above, the 77% growth in data usage has been attributed to a 33% reduction in data rates. In the meantime, revenues from voice alone declined by 7% whereas revenues from SMS remained flat. The two core services can also experience significant growth rates if their tariffs are decreased by a figure like 33%.
Others asked Safaricom why they aren’t upgrading all their networks to offer a minimum of 3G services in every part of the country despite making those billions of shillings in profits.
On the request to expand its 3G coverage, Safaricom promised to expand its 3G network from the current 78% to 82% by the end of this financial year alongside guaranteeing call drops. The current nationwide Internet coverage is such that 95% of the country is covered by 2G network. By the end of the 2015/2016 Financial Year, Safaricom had already rolled out 416 Stations offering 4G Internet mostly in Nairobi and partly in Mombasa and Nakuru.
Shs 38.1 billion as Safaricom 2015 Profits is indeed huge, and if Safaricom actually cares for those of us who normally complain about their services, including pointing out some avenues they use to syphon money from Kenyans without express permission by Kenyans, then Safaricom should use the billions of shillings to address the many issues raised, including but not limited to reducing call rates, restructuring the data services to stop deducting airtime by default when data bundles run out, and offer better, more affordable, and reliable Internet services.