M-Pesa and Data Push Safaricom Profits Up by 38% To 31 Billion


Safaricom has today released its FY 2014/15 financial results posting a 38% increase in profit after tax to shs. 31 billion. The results were attributed to a massive growth in non-voice revenue that registered a 27% increase to 68.8 billion.  The two core aspects of Safaricom’s non-voice strategy are financial services such as M-pesa and Data.  Safaricom currently has 67.4% of the market with 23.3 Million customers. At the same time, the rate of customers leaving the network dropped to 17.3%.

M-pesa contributed 20% of the company’s total revenue with transactions of Shs 4.2 Trillion done using the platform. The service registered a 23% growth in revenue to Shs. 32.6 billion.  M-pesa has 13.9 million monthly users which represents a 14% increase. Safaricom has also moved towards diversification of its M-pesa platform with the launch of the Lipa na M-pesa merchant service, M-pesa surepay and M-shwari.  These services also witnessed increased uptake with 49,413 Lipa na M-pesa agents and 11.6 billion worth of payments done on the platform monthly.  The M-shwari service has 5.8 monthly users. Safaricom recently relocated the M-pesa servers from Germany at a cost of $75 million to Kenya.

Mobile data registered a 59% growth with monthly data customers increasing to 11.6 Million which represents 50% of Safaricom’s customer base. Interestingly, 4.3 million customers were using 3G enabled phones with 3.4 million using smartphones. In total mobile data revenue stood at shs 14.8 billion. Customers using Safaricom’s fixed data grew by 23%. 69% of Safaricom’s customers are currently covered on the 3G network with the goal being to increase coverage to 80%. Safaricom is currently working on bringing its 4G network to 13 towns by the end of the year. Currently only Mombasa and Nairobi are covered with 236 4G sites. Plans are also underway to migrate voice data from 2G to LTE in six months with the latter being cheaper to maintain.

Going forward, Safaricom plans to capitalize on the platform for deepening financial inclusion as well as grow revenues through provision of innovative products as Kenya moves towards a cash lite economy. Safaricom also plans  to grow its data business especially on mobile through affordable data. The company also announced Safaricom’s home broadband solution through The Box set top box that brings 3G and 4G to the home. The box is set to be launched tomorrow.

Voice revenue grew 4% to Kshs 87.4 Billion while messaging increased 15% to kshs. 15.6 billion representing 10% of the company’s revenue. This was bouyed by SMS promotion services and affordable SMS services. Safaricom has cash reserves of Shs. 27.5 billion.