Safaricom, Kenya’s biggest telecoms operator, reported strong growth in profitability for the first half of the financial year 2023-2024 on Thursday.
The net income of the Kenyan business increased by 10.9% to KES 41.6 billion, while the group net income, excluding minority interest, rose by 2.1% to KES 34.2 billion.
The group service revenue also grew by 10% compared to the same period last year.
The improved performance was mainly driven by the reduction of prices in the Kenyan market, which enabled customers to access more services at lower costs.
Since 2020, Safaricom has reduced the prices of data by up to 65%, voice calls by up to 44%, and M-PESA transactions by up to 61%.
The telco also launched a youth-oriented product, Safaricom Hook, and expanded its 5G network coverage.
“Our results reflect our commitment to supporting our customers with enhanced value and reduced prices on our products and services. We understand that everyone is facing challenges, and we want to help our customers cope.
The lower prices have encouraged our customers to use more of our services, leading to double-digit growth in profitability and revenue,” said Peter Ndegwa, Safaricom CEO.
The company also achieved significant milestones in its Ethiopian operations, which boosted its commercial momentum.
The company registered over 1.2 million customers on its M-PESA platform in less than two months, demonstrating the high demand for mobile money services in the country.
“This confirms our expectations about Ethiopia as a key driver of our future growth. We aim to maintain this momentum in the second half of the year,” he said.
Safaricom’s strategic vision is to deepen financial inclusion and promote a cash-lite economy in Ethiopia, where only 35% of the population has access to formal financial services. The company also sees more opportunities in mobile data, which has shown high usage levels among its customers.
“We are impressed by the data consumption in Ethiopia, which surpassed Kenya in September. It took us almost 10 years in Kenya to reach such levels,” Mr Ndegwa said.
In September, the average data usage per customer in Ethiopia was 4.3 gigabytes, compared to 3.7 gigabytes in Kenya.
Key Results, Including Safaricom Group
- Service revenue, +9.3%YoY to KES158.3billion
- EBIT (Kenya), +14.9% YoY
- CAPEX, +11.5% YoY
- Voice & Messaging revenue, -1.9%YoY
- M-PESA revenue, +16.5%
- Mobile data revenue, +12.5%YoY
- Fixed data, +9.1%YoY
