Safaricom has recorded a half-year net profit to September of Ksh37.05 billion, a 12.1 percent rise compared to a similar period the previous year.
Service revenue grew 16.9% YoY in H1 FY22 supported by strong execution, recovery in M-PESA revenue following the return to charging on Person to Person and Lipa na M-PESA transactions below KShs 1,000 beginning January 2021, and improved consumer confidence and business activity in the economy.
“The pandemic dealt a major blow to the economy in 2020 but we are encouraged with the gradual recovery recorded across major sectors of the economy including agriculture, manufacturing and tourism sector,” said Safaricom.
According to World Bank, the economy is expected to continue to recover and gradually return to growth of above 5 percent in 2021.
Following the increase of excise duty on airtime and other telephony services from 15% to 20% effective 1 July 2021, the telco absorbed tax on mobile data from August 2021 and passed on tax on voice and fixed which slowed down industry momentum.
Voice revenue increased 3.2% YoY while messaging declined 18.3% in H1 FY22. Growth in voice is attributed to increased Customer value Management (CVM) initiatives and propositions.
The voice traffic share stood at 68.2% as of June 2021 according to Q4 Communications Authority industry statistics report. Voice outgoing minutes have grown 30.2% YoY while incoming minutes grew 13.8% YoY. Outgoing minutes of use per subscriber grew 22.6% YoY. Voice and messaging revenue recorded a marginal blended decline of 0.1% YoY and account for 34.2% of service revenue.
M-PESA recorded strong performance growing 45.8% YoY in H1 FY22 following the return to charging beginning of January 2021.
Total transaction value grew 51.5% YoY to KShs 13.7Trn while volume of transactions grew 42.0% YoY to 7.3Bn. M-PESA wallet to bank and bank to M-PESA wallet transactions continue to be free and these account for 18.1% of the total value of M-PESA transactions.
Velocity in the M-PESA eco-system and customer transacting behaviors influenced by the free fees introduced last year have sustained post return to charging. Chargeable transactions per one month active customers grew 91.9% YoY to 18.1 transactions. This is attributed to increased activity in the eco-system with 67% of total registered M-PESA customers making up the one month active M-PESA customers. M-PESA now accounts for 37.8% of service revenue, reflective of the opportunity for digital financial services to consumers and enterprise customers. Innovation in digital financial services has been a key growth driver for M-PESA.
Mobile Data Distinct data bundle customers grew 8.1% YoY to 17.0Mn with data customers using more than 1GB growing 26.7% YoY to 6.8Mn.
Effective rate per MB has continued to decrease as we drive affordability, declining 27.0% YoY in H1 FY22. Mobile data revenue grew 6.3% YoY weighed down by price rationalization, absorbed tax from excise duty adjustment from August 2021 and a lapping effect of accelerated growth recorded in H1 FY21 that was largely driven by a shift in working and schooling from home trends.
Active 4G devices grew 37.3% YoY to 9.7Mn while 4G handsets using more than 1GB in our network grew 22.2% YoY to 4.7Mn representing 48% of all 4G devices. 4G, 3G and 2G population coverage now stands at 96%, 96% and 97% respectively.
“We continue to invest in CVM initiatives to unlock latent potential in usage and growth as well as drive smartphone penetration through our device financing programme,” added Safaricom.