Kenyans’ increased M-Pesa, data usage sees Safaricom’s net profit surge to Sh36.7bn

Kenyans have been using Safaricom’s services at an all-time high, with the telecommunications company posting impressive results for the first half of the year.

According to the telco, it reported a 16.6 per cent growth in M-Pesa revenue, generating Sh77.22 billion, supported by an increase in average revenue per user (ARPU) and chargeable transactions.

This is in addition to Safaricom’s broader success, with total group service revenue growing by 14 per cent to hit Sh181.4 billion.

Safaricom CEO Peter Ndegwa said the company’s comprehensive net profit for the period stood at Sh36.7 billion, marking a solid performance despite challenges outside Kenya.

He noted that the Kenyan unit, however, recorded a net profit of Sh47.5 billion, a 14.1 per cent growth, contributing to the overall positive results.

However, Safaricom's earnings were impacted by currency devaluation in Ethiopia, where net earnings dropped by 17.7 per cent to Sh28.1 billion.

The Ethiopian currency fell by 30 per cent against the US dollar following the government’s decision to ease currency restrictions to secure a $10.7 billion loan from the International Monetary Fund (IMF) and World Bank.

“We have seen great performance in new products like Pochi la Biashara and Merchant overdraft products as we continue to support our SMEs in our ecosystem,” Ndegwa said.

He added that mobile data also played a crucial role in Safaricom’s growth, recording a 20.2 per cent year-over-year increase to Sh35.55 billion. The growth was fueled by a 13.5 per cent increase in ARPU and an expanding customer base.

Additionally, the number of one-month active mobile data customers grew by 10.5 per cent to 28.83 million, while data usage per chargeable subscriber rose by 9.8 per cent, reaching 4.12GB.

4G, 5G increase

Safaricom has also seen an increase in the use of 4G and 5G devices, with 4G devices growing by 33.5 per cent year-over-year to 19.22 million.

Ndegwa highlighted that mobile data now accounts for 20 per cent of service revenue, with a continued push to drive 4G device penetration through the company’s financing program and locally assembled devices from the East Africa Device Assembly Limited Kenya (EADAK) factory.

In addition to mobile data, Safaricom’s fixed services saw substantial growth. The company’s fixed service and wholesale transit revenue grew by 14.7 per cent to Sh8.45 billion, while consumer revenue rose by 23 per cent to Sh3.71 billion.

Fixed broadband services have been a significant contributor to this performance, with Safaricom’s market share in broadband rising to 36.4 per cent by June 2024.

Voice service also performed strongly, with a 4.8 per cent revenue growth to Sh40.55 billion. The number of active voice customers grew by 10.6 per cent to 28.46 million, and minutes of use per subscriber rose by 7.6 per cent. Messaging revenue grew 8 per cent to Sh6.20 billion, boosted by campaigns like Chat Ibambe.

“We have increased internet speeds for our home and business customers to meet the growing needs of individual and enterprise customers,” Ndegwa said.

"Our broadband position remains strong, and we will continue expanding our services.”

Despite external challenges, including the currency issues in Ethiopia, Safaricom said it has continued to show resilience, with strong performances across all service lines.

The company has marked 24 years of operation in Kenya, reflecting the success of its strategy and commitment to transforming lives through technology.

“This performance, which comes at a time when we are marking 24 years of connecting and transforming Kenyans’ lives, reflects the relentless execution of our strategy,” Ndegwa said.

“We are proud of the value that we have given our customers through the use of technology, and we will continue growing our core business while expanding into new services through our innovative spirit.”