Safaricom has reported a 19.1 per cent increase in M-Pesa transactions for the half year of 2019
According to the telecommunications provider, it has a one month active M-PESA customer base which grew by 12.4 per cent year-on-year in the half year, with 23.6 million customers.
The number of M-PESA chargeable transactions per customer per month has increased by 7.8 percent, though its growth excludes gaming, which was 17.5 percent.
M-Pesa recorded growth in the new business segment of 8.7 percentage points, driven by such aspects as international money transfer services, which grew by 44.6 percent year-on-year; as well as savings and lending which was greater than 100 on services such as M-Shwari and KCB M-Pesa.
“M-PESA now accounts for 33.8 per cent of service revenue. This represents an increase of more than 7ppts from just three years ago, as our business model continues to evolve further from that of a traditional telco,” says the company.
M-Pesa has driven Safaricom’s revenue growth for the year by a growth of Kshs 6.5 billion shillings, or 18.2 per cent year-over-year.
“Mobile data revenue grew at only 4% year on year for the period. We are happy to note that for the month of September it grew 12% as we have now lapped the effects of the corrective actions we took last year,” says the telecommunications company.
Safaricom, which has a market capitalisation of Kshs 2.9 trillion in the fourth quarter of this year, states that in its half year 2020 results, it has a monthly active customer base, which grew at a rate of 8.9% year-over-year.
“We are excited about the future as we simplify our product offerings and customer service journey and look forward to welcoming more customers to the Safaricom family” says the interim Chief Executive Officer (CEO) of Safaricom, Mr Michael Joseph.
It also says that it is hoping to expand its 4G services, in which it has invested Kshs 18 billion, a billion shillings more than it did last year to the entire parts of Kenya by the end of the year by 63 percent.
The telecommunications company recorded a strong operating performance, which based on its Earnings or Profit Before Interest and Tax (EBIT), grew by 12.7%; while its net income, or Profit after Tax, grew by 14.4% for the period.
Mr Joseph says that the telecom provider has been able to make a 6.3 percent contribution to Kenya’s Gross Domestic Product (GDP), states that its corrective actions that it took last year regarding repositioning its data bundles, have been taking positive effect.
On October 23rd 2019, the firm announced that there was “no expiry data” on its calls, data bundles and Short Message Services (SMS’), which followed the company’s introduction of no expiration of its data bundles for customers, who wanted to view the INEOS 1:5 marathon challenge on YouTube on October 12th.
“Our customer growth remained strong in the first half of this year. As can be seen in the graph in the middle, we have more than doubled our net additions versus last year,” he says.
Safaricom also recorded a continued strong operating performance, as its Earnings or Profit Before Interest and Tax (EBIT), grew by 12.7%, while its net income, or Profit after Tax, grew by 14.4 percent for the period.
The growth was around 8 percent and also the slow-down in the gaming industry, which declined by -15.5 percent in the half year of 2020, though it recorded an uptake of 7.6 percent in the half year of 2019.
Statistics from the Entertainment and Media Outlook: 2018-2020 edition, the gaming industry in Kenya was worth $ 63 million, as of three years ago. Gaming services include e-sports tournaments, such as Fifa, gaming cafes and call of duty.
According to Safaricom, it continued to post solid service revenue growth and double-digit returns for its shareholders.
Safaricom’s service revenue for the period grew at a rate of 5.3 percent, year-over-year.
On an underlying basis, the growth of Safaricom in the Halwas around 8 percent, but it was also adversely affected by the slow-down in the gaming industry.
The rate per mega bytes reduced 37 percent year-on-year in the period, the rate per SMS reduced 19 percent and the rate per minute reduced 7 percent and we believe this is driving the positive trajectory in our customer growth.
Safaricom has also recorded instances of growth in other sectors. For instance, on fixed data, which grew by 18.4 percent and contributed just under 1ppt of total growth and is now 3.7 percent of Service Revenue.
Another area is Premium Rate Messaging (PRS), such as news alerts. This has declined significantly year on year as part of the corrective actions we took in the second half of last year.
With regard to Voice and SMS revenue, Safaricom has been able to record a growth of 34.7 percent in the half Year of 2020, down from 43.2 percent in 2017. Within the duration, it recorded messaging of 6.9 percent in the half year of 2010, down from 8.8 percent in 2017.
From the same pie chart you can see that new business contributed 8.7 ppts or, just under half of the overall growth.
Moving right, across the top of the slide, you can see the make-up of the new business growth.
Savings and lending contributed 5.7 ppts, or two thirds of this driven by Fuliza, a mobile app that is linked to M-Pesa.
According to Safaricom, within nine months, Fuliza now makes up half the revenue in the savings and lending bracket, demonstrating how the use of data analytics can drive innovation and growth.
The growth of the telecoms payments growth of 11% was subdued by the slowdown in gaming. On a normalized basis, growth was 24 percent year-on-year (Y-o-y), states Safaricom.
Safaricom’s year-over-year growth for the half year 2019 period was 4 percent, was subdued, though it was consistent with what the company had been able to forecast at the start of the year.
Using bar charts to explain its performance, Safaricom says that it has been able to grow at a rate of 14.6 percent growth sequentially, up from Kshs 17.3 billion to Kshs 19.8 billion.