Safaricom, Kenya’s biggest telecoms operator, has maintained that Voice and messaging remain important despite its customers transitioning to data services.
During the release of its H1’2023 financial results for the period ending 30th September 2022, voice revenue declined 3.8% to Ksh 39.9 billion compared to HY22 – Ksh41.5 billion in line with global trends.
Voice accounted for 27.5% of total service revenue at the end of the reporting period, a decline from 29.9% HY22.
On the other hand, messaging revenue declined 7.7% to Ksh 5.4 billion compared to Ksh5.9 billion reported in HY22. The contribution of messaging to total service revenue declined by 3.7% compared to 4.2% and 6.1% in HY22 and HY21.
Why Defend Voice
Dilip Pal, Safaricom’s chief financial officer, said, “Voice has been challenging as a revenue item.”
According to Dilip customers have been opting for other means of communication, and their customers are asking for value.
“We have also been optimizing our price to support that value proposition. We managed to increase the volume of usage by customers, so it’s not that it’s stagnating in a way that people are using less. People are using less with lower rates, which has been deliberate from our strategy reducing the premium on the Voice side to ensure that customers get more value.”
He also emphasized that the two have remained flat, and Voice is still 27%-28% of their revenue, “so we can’t ignore I say that we are we have to defend Voice. One is to make sure that the pace of decline is slow. The second is to make sure that we get the customers we want. That’s the entry point for everything that we do.”
Dilip, in conclusion, states, “Voice is important because it is the most important portfolio we have when a new customer comes in. That is where they start their service with. So we need to ensure that everything we do is on top of that.”
“So that’s why we keep focusing on ensuring that our traffic share, our voice subscriber share, we retain.”
Data from the Communications Authority for Q4 2021/22 shows that Safaricom’s voice traffic and messaging market share are 66.3% and 90.3%, respectively, as of June 2022.