Home Business Data And M-Pesa Key Players In Safaricom’s Revenue Growth #SafaricomResults

Data And M-Pesa Key Players In Safaricom’s Revenue Growth #SafaricomResults

by Femme Staff

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Safaricom still holds the largest subscriber share in the market with its customer base now at 23.3 million which is an 8% increase from the previous year. The increase has also seen 13% total revenue growth which now stands at 163.4bn through a leverage on non-voice service revenue.

Non-voice services which entail of data and mobile money platform M-PESA account for 42% total revenue in the telecommunication company. The two products saw an increase of 27% to Ksh 68.8bn while voice service revenue grew 4% to Kshs 87.4bn.

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 Safaricom 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.

Improved network, convenient airtime distribution, attractive consumer propositions and promotions such as ‘Tetemesha’ campaign contributed to the voice service revenue increase while promotions like ‘Bonyeza Ushinde’ contributed to the increase of messaging revenue representing 10% of the total revenue. Messaging revenue increased by 15% representing 10% of the total revenue also influenced by use of affordable SMS bundles.

M-Pesa, now contributing 20% of total revenue continues to be a significant driving factor in the company’s 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 MPesa agent outlets to 85,756 thereby promoting accessibility of the service to 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.

Safaricom commissioned another independent drive test to measure key quality metrics such as dropped calls, voice quality and data speeds, these tests confirmed the network could be the best in Kenya also delivering world class data and voice services.

In light of the strong financial performance in the past year, the Board recommends a dividend of Kshs 0.64 per share – an increase of 36%. Pending approval by shareholders we will pay out a dividend of Kshs 25.64bn, which represents 80% of our net income, for the year ended 31 March 2015; once again, the largest dividend in Kenyan history.

Strategic Priorities

Safaricom is looking to deepen financial inclusion in Kenya through M-Pesa. In the past, the company has been commercializing the revolutionary Lipa na M-Pesa service that enables customers to use their to use their M-Pesa account as a method of payment when retail shopping.

“We believe that in March 2015 Lipa na MPesa substituted approximately 5% of what was previously a cash transaction, and our goal is to accelerate the inroads. This will make a significant contribution to the lives of our customers and move Kenya towards a cash-lite economy.” Said Safaricom’s CEO Bob Collymore.

The company also anticipates being a significant business partner in providing relevant and innovative ICT solutions in the market. In that line, the company is ready to complete the fibre connection of the first 1,000 buildings to further enhance its hosted PABX, fixed calling, fixed data, cloud services and managed services offerings.

Among other strategic plans is to provide home broadband solution in a set top box rollout that is anticipated to bring 3G and 4G network into the home to distribute superfast connectivity via Wi-Fi enabled devices. The set-top box will allow Kenyans to view free-to-air TV channels with a wider range of relevant content and video on demand in the coming year.

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