Safaricom Group has delivered strong financial performance for the first half of the year, defying multiple challenges in the operating environment, including floods, economic disruptions, and the impacts of foreign exchange regime reforms in Ethiopia. The company recorded positive growth across all its key business segments, with M-Pesa and mobile data services leading the charge.
According to Safaricom’s Chief Finance Officer, Dilip Pal, the company’s service revenue grew by 13.1%, reaching Sh179.9 billion. The mobile money service, M-Pesa, was a major contributor to this growth, accounting for 50% of the company’s total service revenue. M-Pesa revenue grew 16.6% to Sh77.24 billion, fueled by a robust performance in Kenya as well as increased adoption of new financial products within its ecosystem.
Strong M-Pesa Growth
In Kenya, M-Pesa saw impressive revenue growth, increasing by 16.6% to reach Sh77.22 billion. The key driver of this growth was a 13.1% rise in the Average Revenue Per User (ARPU), which now stands at Sh389.27. Furthermore, Safaricom witnessed a significant rise in chargeable transactions, with active one-month customers growing by 4.1% to 33.46 million, while the volume of transactions per customer jumped by 25.6% to 37.37.
The company’s efforts to broaden M-Pesa’s use cases have also paid off, with notable successes in products such as Pochi la Biashara and merchant overdrafts (Fuliza). The number of Pochi Till merchants grew significantly, more than doubling to 869,020, while the customer base for Fuliza grew by 72.9% to 52,270. These new financial services, targeted at supporting small and medium-sized enterprises (SMEs), have further expanded M-Pesa’s ecosystem and strengthened its position as Kenya’s dominant mobile money platform.
Total transaction value on M-Pesa rose 10.7% to Sh20.85 trillion, while transaction volumes surged 30.6% to 17.09 billion. The increased volume and value of transactions illustrate the growing reliance on M-Pesa for a variety of financial transactions, from business payments to personal money transfers. The total number of M-Pesa agents also grew by 2.4%, reaching 266,007, ensuring widespread access for users across the country.
Expansion into Ethiopia
Safaricom’s efforts to expand M-Pesa into Ethiopia, where it launched in 2022, have also started to show promising results. In the first half of 2024, M-Pesa revenue from Ethiopia reached Sh24.4 million. The company reported 8.31 million registered customers, and the number of active M-Pesa agents stood at 3,160, with active Lipa na M-Pesa merchants rising to 6,600. The volume and value of transactions in Ethiopia were recorded at 86.5 million and Sh10.94 billion respectively, signaling strong early adoption.
Mobile Data Revenue
Alongside M-Pesa, mobile data has become another critical growth driver for Safaricom. Mobile data revenue increased by 21.5%, contributing Sh37.6 billion to the company’s earnings. The growth was primarily driven by a 13.5% rise in ARPU for mobile data, now at Sh263.25, and a 10.5% increase in the number of active mobile data customers to 28.83 million.
Data usage per chargeable subscriber grew by 9.8% to 4.12GB, while the number of distinct data bundle users rose by 10.2%. Safaricom’s success in expanding mobile data usage has been bolstered by improved device penetration, the provision of relevant content to encourage usage, personalized offers using data and analytics, and targeted campaigns aimed at increasing customer engagement.
Other Revenue Streams
In addition to mobile money and data, Safaricom also recorded growth in its other revenue streams. The voice revenue grew by 4.8% to Sh40.87 billion, while fixed internet revenue rose by 13.1% to Sh8.3 billion. SMS revenue also showed an increase of 8% to reach Sh6.3 billion. These diversified revenue sources have helped Safaricom maintain a strong financial position, even as the competitive landscape becomes more challenging.
Market Share and Customer Growth
Safaricom continues to lead the Kenyan mobile network market, holding a commanding 65.4% market share as of June 2024. Overall, the group’s customer base grew by 7.8% year-on-year to 52.01 million, while one-month active customers increased by 10.8% to 39.75 million. This customer growth, combined with the increasing adoption of mobile money and data services, positions Safaricom as a strong player in the region.
Conclusion
Safaricom’s half-year performance underscores its resilience in the face of economic and social challenges. The company’s growth in M-Pesa, mobile data, and other services demonstrates its ability to innovate and cater to the evolving needs of its customers. As Safaricom continues to expand its product offerings and grow its customer base, it remains well-positioned to maintain its leadership in the competitive East African telecom sector.
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