East-Africa-based telecommunications company, Safaricom, ended its business year on March 31, 2021. The telecom giant marked 20 years of servicing the African market and released its financial report on Thursday, May 13, 2021.
As with many other businesses, the first half of the fiscal year was difficult for the company because of the COVID-19 pandemic.
Despite a subdued financial performance, the company had some solid wins.
Like the previous financial year, revenue from voice and messaging declined, with Internet data experiencing a revenue boost.
Messaging revenue went from KSh 15,193.8 million (~$141,619) to KSh 13,602.4 million (~$126,787), which was an 11.7% drop. The Average Revenue Per User (ARPU) for their monthly active messaging customers reduced from KSh 60.77 to Ksh52.7.
For voice services, revenue fell by 4.6%, with a decline from KSh 86,349.4 million ($804,826) to KSh 82,55.0 million ($769,473). The ARPU for active monthly voice customers went from KSh 287.16 to KSh 257.72.
Internet revenue took an impressive leap from KSh 39,641.9 million ($369,513) to KSh 44,793.2 million ($417,554). With a year-on-year increase of 11.5%. This has been the trend as other telecom giants in Africa recorded revenue boosts in Internet data in recent financial reports.
M-Pesa gets shaky
In this fiscal year, the company’s mobile money platform, M-Pesa, experienced a slight dive.
In what happens to be the first of its kind, revenue dropped by 2.1% in the first half of the financial year, falling from KSh 84,382 billion ($786, 545,581) to KSh 82,647 billion ($770,410,517).
This could be because of fees waived on person-to-person (P2P), Bank to M-Pesa wallet (B2C), and M-Pesa to bank wallet (C2B) transactions of KSh 1,000 ($9.32) and below.
The waiver was to curtail the rapid spread of COVID-19. When the waiver ended in January 2021, P2P transaction charges were reduced by 45% for low-value transaction bands below KSh 7,500 ($69.91), while B2C and C2B transactions remained free.
However, M-Pesa recovered significantly. Total M-Pesa transaction value grew by 58.2% YoY to KSh 22.4 trillion ($208.8 billion).
The volume of transactions grew by 29.8% to eleven point six billion. Currently, M-Pesa accounts for 33.0% of Safaricom’s service revenue.
Plans for the new year include setting up 5G trials across more Kenyan cities. The report also reveals plans to launch an M-Pesa mobile application by the second half of the new fiscal year.
Furthermore, Safaricom used the report to publicise its plans to integrate with Amazon. If this integration happens, M-Pesa users will be able to pay for goods with their mobile wallets on the eCommerce platform.