M-PESA is Safaricom’s Top Earner as Net Profits Hit KES 63.4 Billion Amid Poor One Tap Performance

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Bob Collymore
Bob Collymore, CEO, Safaricom

Safaricom’s FY2019 earnings have been announced in an event held earlier today at the telco’s head office. The numbers are not surprising because the carrier has been reporting positive growth from year to year.

2019’s service revenues saw a 7% jump year on year, a development that was also supplemented by robust operating performance marked by a 13.1% growth in earnings before income tax. On the whole, Kenya’s biggest carrier net income rose by 14.1% to KES 63.4 billion shillings.

According to Safaricom Chief Financial Officer Sateesh Kamath, the mobile telecom’s campaigns and value propositions were attractive to its millions of customers that hit the 30-million mark a few weeks ago.



2.3 million new customers

In the past year, Safaricom registered 2.3 million new customers. This is a 58% jump over the 1.4 million it added in the preceding year. Mr. Sateesh added that new customers contributed up to 7% YoY growth in service revenue.

M-PESA

Safaricom’s mobile money product M-PESA is the telco’s biggest money-maker, followed by voice (outgoing) and mobile data. In fact, M-PESA accounted for 75 percent of the overall growth in the year after registering a 19.2% jump year on year.

To put these numbers into perspective, the financial product accounts for 31.2% of service revenues. What’s more, Safaricom says that M-PESA has seen that growth due to new businesses marked by payments, savings and lending (M-Shwari, Fuliza and KCB M-PESA) as well as money transfer such as PayPal services that were introduced about a year ago.

Speaking of Fuliza, the overdraft facility has so far seen the disbursement of KES 45 billion four months after launch.

Out of the new 2.3 million customers that Safaricom registered, 2.1 million are active M-PESA users. The product, as of this writing, has 22.6 million active customers.

M-PESA One Tap

The NFC-powered payments system was launched by the carrier in May 2017. More details regarding its operations can be read here. Either way, the performance of the solution has been deteriorating, and underwhelming growth was highlighted by CEO Bob Collymore’s remark that the idea was not great after all. Will it be axed? Probably.

Voice over LTE

Safaricom did not reveal any specifics regarding the official rollout of VoLTE. Earlier this year, the carrier said it was performing a series of tests using multiple devices from several vendors in the country. Our educated guess is that the tests are still in place.

Nevertheless, Safaricom has revealed that 4G services are now available in all major towns and urban centres in Kenya, which is not a small feat, to say the least.


CEO Bob Collymore Tenure

It has since been reported that there is a possibility Collymore’s tenure will not see further extension as the current CEO plans to retire quietly for health reasons. For this reason, the board has been conducting interviews for possible replacements. The government of Kenya, through ICT CS Joe Mucheru’s office insists that the incoming CEO should be Kenyan. However, that is a decision to be made by the Safaricom board, which, through its Chairman Nicholas Ng’ang’a, revealed that it had considered a local candidate. To this end, the board will communicate its ruling at a later date, which can also change if Mr. Collymore’s tenure is renewed as it was the case in 2015 and 2017.

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