Safaricom Voice and SMS Revenues Drop as it Eyes the Ethiopian Market

Safaricom CEO Michael Joseph

Safaricom CEO Michael Joseph

Telco Safaricom has announced unaudited results for the six months ended 30 September 2019. The numbers are what we have come to expect from the carrier for an extended period now: revenues from all streams and services netted the carrier billions of shillings, save for messaging whose income dropped by 11.0 percent to KES 8.60 billion and voice whose revenue declined by 1.4 percent to KES 46.87 billion.

The decline was linked to Safaricom’s corrective actions that allowed better management of subscriptions.

“This decline was partly driven by competitive pressures and migration to newer technologies, and partly by the impact of corrective actions taken last year to make it easier for our customers to manage their premium rate subscriptions, and opt-out of them were no longer needed,” said CEO Michael Joseph.

Still, voice is still the operator’s largest money-maker, followed by M-PESA and data services.

M-PESA now has 23.61 million one-month active users. The mobile money product saw its revenues grow by 18.2 percent to KES 41.97 billion.

On the whole, profit before interest and tax rose by 12.7 percent to KES 49.82 billion in the period under analysis.

4G Expansion Strategy

Safaricom looks forward to covering every town in Kenya with 4G services. LTE is speedier than 3G and has been one of the major reasons Safaricom data services are loved. The expansion should be concluded before the year ends and is one of the main agendas of the carrier’s interim CEO Michael Joseph.

Safaricom has since supplemented its 4G coverage with an extra 732 sites in the period, pushing its coverage to a respectable 63 percent.

“We have always believed that investment in our network and infrastructure is a key to success, and continue to invest ahead of the curve.  In the first half of this year, we accelerated our 4G rollout as promised, adding an additional 732 sites in the period, a growth of 50% year on year and reaching 63% coverage as we strive to cover every town in Kenya by the end of the year,” commented Michael Joseph whose tenure will end in April 2020 to make way for the newly-appointed CEO, Peter Ndegwa.

Ethiopia Prospects

Safaricom has since expressed interest in setting a base in Ethiopia. The country, which has a population of more than 100 million people, is mostly served by a single player, Ethio Telecom.

Safaricom has been given the go-ahead by the Ethiopian government to either buy a stake in the named telco that is up for sale or starting operations as a new company. Safaricom is also pursuing the necessary licenses and documentation required for activity.

Not much has been given about the development because everything is still in the early stages. However, it appears Safaricom’s interest in entering that market is yet to face any obstacle, at least for the moment.

On Airtel-Telkom Merger

Safaricom says it is not derailing the merger but wants some things done right. First, the two carriers owe Safaricom KES 1.2 billion. Secondly, Safaricom wants the CA to level the playing ground for every operator. Lastly, Safaricom wants the CA to allocate frequency based on the number of customers a carrier has. If the merger is approved, which should theoretically be official before the year ends, then Airtel-Telkom will have access to a larger spectrum with half as many subscribers as Safaricom.

So far, the issues have not been resolved.

Previous articleTanzanian Comedian Arrested For Posting a ‘Face Swap’ With Magufuli’s Face
Next articleZone Launcher Makes It Easier to Access Your Apps with One Swipe
Avatar photo
Kenn Abuya is a friend of technology, with bias in enterprise and mobile tech. Share your thoughts, tips and hate mail at [email protected]