Mpesa Closes In on Voice Revenues As Safaricom Reports KES 63.4 Billion Net Profit

Bob Collymore

Safaricom has announced its full-year financial results reporting a net income increase by 14.7% amounting to Ksh 63.4 billion for the year ended 31st March 2019. Among the key performance indicators in revenue generation, M-PESA grew 19.2% amounting to 74.99 billion for the year.

The growth in M-PESA has been driven by an increased number of users, higher velocity of funds within the ecosystem, and adoption of new use cases. MPESA now accounts for 31.2% of service revenue, further accelerating displacement of traditional voice and messaging services. In the period, the telco added 2.1 million active M-PESA customers.

“Service Revenue growth of 7% for the year was driven by strong M-PESA performance, contributing roughly three-quarters of the service revenue growth. Mobile data and fixed data combined contributed roughly one-quarter of the growth,” said Safaricom PLC CEO Bob Collymore.

Fixed data contributed 3.4% total service revenue and grew at 22.7% year on year in the period while mobile data revenue increased by KShs 2.33bn on an absolute basis. Voice grew 0.3% amounting to Ksh 95.94 billion and messaging declined 1.3%, driven by competitive pressures and migration to newer technologies.

In this financial year, Safaricom recorded 7.7% increase in the number of customers to 31.8m, which supported its Services Revenue of growth of 7.0% driven by M-PESA, mobile data and fixed data as we continue to offer new and innovative products at more affordable prices like Fuliza with Kenyans borrowing Ksh 45 billion in just three months.

With capital expenditure amounting to Ksh 37.25 billion to finance its expansion, the company levered its
statement of financial position and continued to invest a significant portion of internally generated cash contributing to the revenues of the Government and remitted KShs 98.13bn in duties, taxes and license fees for the period ended 31 March 2019.

In 2014, Safaricom became the first to roll out a 4G network in Kenya and in June 2017, became the first in East Africa to upgrade a section of its 4G network to 4G+. 4G provides customers with speeds of up to 100 Megabits per second with Safaricom’s 4G+ network supporting double the 4G speeds.

The telco expects to spend over KES 36 billion in driving up additional 4G coverage, which will see the company roll out an additional 2,030 4G and 4G+ base station to reach more than 80 percent of the population.

“For a majority of Kenyans, the mobile phone is often the first and only link to the Internet. By broadening our 4G coverage to almost anyone in the country, we aim to ensure that no one has to miss an opportunity or get left out because of lack of access to affordable, quality, high-speed broadband, ” noted  Collymore.

Safaricom looks to sustain its momentum of investing in the quality of our service and diversification of our revenue portfolio to ensure sustained returns to shareholders in the future.

“We remain committed to our purpose of transforming lives. Our latest True Value Report indicates that Safaricom’s value to the Kenyan society increased by 12% to KShs 543 billion. This was 10 times more than the financial profit the company made during the same period, and we contributed a total of 6.5% to the country’s Gross Domestic
Product. We continue to leverage in the power of mobile technology to deliver on shared value propositions that disrupt inefficiencies and impact lives positively,” he mentioned.