Safaricom has registered its first revenue since the launch of its commercial operations in Ethiopia. Safaricom Ethiopia Service revenue for the period ended September 30th 2022 was Kshs. 9.1 million, while the total revenue including handsets sales was Kshs. 98.3 million.
Safaricom Kenya net income grew by 0.6% year on year, supported by the 4.6% growth in revenue. The firm delivered a solid set of results despite the prevailing macroeconomic challenges leading to a tough operating environment in Kenya and elevated pressure on consumer spending. “We are pleased with the commercial progress made in Ethiopia since the launch of operations early last month. Most importantly, we are enthusiastic on the growth opportunity in Ethiopia, with over 740,000 customers so far and 20,000 new ones joining the network daily,” said Peter Ndegwa, CEO, Safaricom.
He further noted that Safaricom had invested over USD 598 million in Ethiopia operations and was encouraged by the early uptake of its services, great customer feedback on the quality of data experience and the revenue contribution by the Ethiopia unit. The Government of Ethiopia has also committed to award Safaricom with the mobile money license which will boost commercial efforts, with a greater focus of driving financial inclusion and digital acceleration for the people of Ethiopia.
During this period, Safaricom rallied a private sector response to the prolonged drought in Kenya through the Pamoja Tuungane campaign. In that respect, it contributed Kshs. 100 million through Safaricom Foundation to help the Kenyans affected by drought in 23 counties. The campaign also received donations in bonga points, cash and in kind from various organisations valued at over Kshs. 32 million. “We have reviewed our value propositions considerably driving more value for the same price points, through effective use of data and analytics to advance personalised offerings to customers. For instance, through our customer value management tool, our data prices have gone down by 31.7% while usage has gone up by 69.8%,” said Mr. Ndegwa.
Voice service revenue dropped by 3.8% to Kshs. 39.88 billion, mobile data revenue grew by 11.3% to Kshs. 26.30 billion, while M-Pesa revenue grew by 8.7% to Kshs 56.86 billion.
“Given the impact of the mobile termination rates from Kshs. 0.99 to Kshs. 0.58, a slowdown in business operations due to the elections period, increase in excise duty on sim cards and mobile phones and a failed rain season leading to more economic hardship for the country, Safaricom has done very well to deliver solid revenue growth and a net income that is within the expected range,” said Mr Ndegwa.
While economic, regulatory and tax headwinds will continue impacting revenue performance, Safaricom anticipates increased usage and customer growth to drive half two momentum. “The board is pleased with the results delivered during the first half of the financial year and remain committed in protecting shareholder wealth, by ensuring management puts our customers first, continuously innovating to offer relevant products, services and solutions to meet their needs,” noted John Ngumi, Chairman, Safaricom board of directors.
Safaricom will soon be launching new products and services in the second half of the financial year, including the M-Pesa Go product to enhance child safety and sound financial knowledge to children below 18 years as well as the anticipated return to charging on banking transactions.