M-Pesa clients transacting at mobile money booths in Nairobi.
Safaricom's M-Pesa is the main driver of profit growth with its 30
million customers making some 12 transactions each a month. PHOTO |
REUTERS
Mobile service operator Safaricom has reported a net profit of
Ksh31.5 billion ($315 million) for the half year ending September 30,
2018, lifted by revenue from its mobile money segment, M-Pesa.
The
company, part-owned by South Africa’s Vodacom and Britain’s Vodafone,
posted a 20.2 per cent increase after tax from Ksh26.20 billion ($256
million) a year earlier.
M-Pesa registered an 18.2 per
cent jump in earnings of Ksh35.52 billion ($355.2 million) up from
Ksh30.05 billion ($300 million) a year earlier.
It was
the main driver of growth for the period, with an average of 30 million
customers making approximately 12 transactions each per month.
Total
revenue, which includes sales of mobile handsets and other one-off
items, came in at Ksh122.84 billion ($1.21 billion) compared with Ksh
114.43 billion ($1.13 billion) in the same period last year.
Growth in data services slowed in the period, declining 10.8 per cent to Ksh19.45 billion ($192 million).
Mobile data accounts for 16.5 per cent of service revenue.
Safaricom’s
service revenue, which includes earnings from its core business such as
voice calls, was Ksh118.21 billion ($1.2 billion), compared with
Ksh109.73 billion ($1.1 billion) last year.
Its 29.94
million customers did not increase their call frequency much, with voice
revenues nearly plateauing, increasing marginally by 1.4 per cent
year-on-year to Ksh48.03 billion ($473 million).
Messaging
revenue was also equally flat, growing by 1.2 per cent to Ksh8.82
billion ($87 million), while fixed services income jumped 21 per cent to
Ksh3.91 billion ($38 million).
Customers have the option of making calls and sending messages using the social application, WhatsApp, which uses the internet.
Lipa
Na M-Pesa revenues have returned to growth this year following the
investment made last year, recording an increase of 49.9 per cent year
on year compared with 0.9 per cent last year.
Discontinued
The
company which celebrated its 18th anniversary last week, was two months
ago hit by the introduction of the Finance Act 2018, which increased
excise duty applicable on voice, SMS and data from 10 per cent to 15 per
cent, in addition to the prevailing 16 per cent VAT on mobile services.
In addition, the Finance Act introduced excise duty on internet
services.
“Following these changes, we were forced to increase our
headline prices for voice, SMS mobile data, home and enterprise Internet
packages, a move that pained both us, and our customers,” said the
telcos chairman, Nicholas Ng’ang’a.
“As consumers
grapple with inflation, higher taxes levied on M-Pesa, voice, SMS,
mobile and fixed data, and our business is finding itself forced to
maintain an increasingly delicate balance,” added Safaricom chief
executive Bob Collymore during the release of the results in Nairobi.
Safaricom
remains the biggest contributor to the exchequer, having paid close to
Ksh48 billion ($473 million) in taxes as of September 2018.
Last
year, South Africa’s biggest mobile phone operator Vodacom bought a 35
per cent stake in Safaricom for $2.6 billion ($26 million).
Even
though the 11-year old M-Pesa service has taken root in Kenya and
spread to the region, it was discontinued in South Africa in 2016 due to
poor uptake because the service does better in markets that are less
developed in terms of formal banking.
Data from the
Communications Authority of Kenya shows that Safaricom shed 1.6 per cent
of its subscribers’ market share in the quarter ended June as rival
Airtel added more users to its network.
This marked the
third straight quarterly drop for the country’s biggest operator, which
had 29.7 million subscribers during the period.
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