Safaricom’s M-PESA Continues to Soar, Driving Profits Amidst Price Reductions

In a financial landscape where adaptation is key, Safaricom’s M-PESA remains the crown jewel, contributing 42.1% to the telco’s revenue in the six months ending September 2023. This marks an uptick from 39.3% during the same period in 2022, showcasing the enduring strength of mobile financial services.

Profitability on the Rise

Safaricom’s financial report for the said period unveils a growth in profitability, with Kenyan business profits surging by 10.9% to KSh 41.6 billion. The catalyst behind this upward trajectory? Reduced prices for products and services. In a statement, Peter Ndegwa, Safaricom CEO, emphasized the commitment to support customers during challenging times, with the lowered prices driving increased service usage and resulting in double-digit growth.

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Revenue Dynamics

While voice services saw a slight dip, accounting for 24.6% of the group’s revenue compared to the previous half-year’s 27.5%, other sectors stepped up. Mobile data claimed an 18.8% share, and fixed enterprise services contributed 2.8% to the profit pie.

M-PESA’s Stellar Performance

M-PESA remains a beacon of success, with one-month active M-PESA customers growing by 3.1% year on year to reach 32.13 million. Lipa Na M-PESA active merchants saw a robust 22.3% year-on-year growth, totaling 658.35k, while Pochi tills stood at 405.21k.

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Ethiopian Expansion

Safaricom’s operations in Ethiopia hit major milestones, fueled by an accelerated commercial momentum. The M-PESA rollout in Ethiopia garnered over 1.2 million customers in less than two months. Safaricom sees vast potential in Ethiopia, where only 35% of the population is financially included. The strategic vision is to deepen financial inclusion and foster a cash-lite economy.

Data Dominance in Ethiopia

Notably, Ethiopia’s average data usage surpassed Kenya’s, with 4.3 gigabytes per customer in September, compared to Kenya’s 3.7 gigabytes. Safaricom sees significant opportunities in M-PESA and mobile data in Ethiopia, even coming off a relatively small base.

Safaricom’s financial narrative reflects resilience, adaptation, and a strategic focus on driving growth through M-PESA, both in its home ground and across borders. The reduced prices have not only served customers but also propelled the telco’s profitability to new heights.