Safaricom has once again proven its resilience in the competitive telecommunications market, announcing a solid performance in its half-year results for the period ending September 30, 2024. The company’s voice and messaging services were major contributors to its overall revenue growth, which has helped maintain its dominance in Kenya’s telecommunications sector.
For the first half of the fiscal year, Safaricom’s voice service recorded a notable 4.8% increase in revenue, generating a staggering KSh 40.55 billion. This growth can be attributed to a rise in usage, with the company reporting a 7.6% year-on-year (YoY) increase in minutes of use per subscriber, translating to KSh 198.31 billion. Additionally, Safaricom’s active customer base grew by 10.6%, reaching 28.46 million subscribers, demonstrating the company’s continued appeal to new and existing customers alike.
CEO Peter Ndengwa attributed this growth to the company’s Customer Value Management (CVM) initiatives, which focus on enhancing the customer experience and stimulating usage. Safaricom has continuously invested in innovative ways to offer personalized services to its vast customer base, further solidifying its position in the market.
Interestingly, despite the increase in minutes of use, the rate per minute for voice calls declined by 9.9% YoY to KSh 1.15, indicating a shift towards affordability and greater accessibility for Safaricom’s customers. This move is part of the company’s strategy to maintain its competitive edge, particularly in an environment where customers are increasingly looking for value for money.
In addition to voice services, Safaricom’s messaging service also demonstrated solid performance, with revenue growing by 8% YoY to KSh 6.20 billion. This growth was driven by successful campaigns such as “Chat Ibambe,” which significantly boosted customer engagement and usage. Messaging services, which are often seen as a more affordable means of communication compared to voice calls, continue to be an important revenue stream for the company.
Together, voice and messaging services now account for 26.4% of Safaricom’s total service revenue, generating KSh 46.75 billion. This highlights the importance of these traditional services in an era where mobile data and internet-based communication are becoming increasingly popular. Nevertheless, the company remains focused on its core offerings while expanding into new service areas.
Overall, Safaricom reported an impressive KSh 181 billion in group service revenue for the period. This was driven by a robust 12.9% YoY growth in the Kenyan unit, which alone accounted for KSh 177 billion in service revenue. The company’s earnings before interest and tax (EBIT) rose by 18% YoY to KSh 79.2 billion, while net income grew by 14.1% YoY to KSh 47.5 billion. This strong financial performance is indicative of the company’s ability to navigate a challenging economic landscape while delivering consistent growth.
One of the most significant achievements during this period was Safaricom’s ability to grow earnings before interest, tax, depreciation, and amortization (EBITDA) by 13.7% YoY to KSh 102.9 billion. This is a clear indication of the company’s operational efficiency and its ability to convert revenue into profits.
Ndengwa, reflecting on the company’s 24 years of service to Kenya, expressed pride in Safaricom’s relentless focus on strategy execution and innovation. He emphasized the role of technology in transforming the lives of millions of Kenyans and reiterated Safaricom’s commitment to further growing its core business while exploring new service avenues.
“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,” said Ndengwa.
This performance highlights Safaricom’s strong foundation, commitment to customer satisfaction, and ongoing efforts to drive growth through innovation. As the company moves forward, it will likely continue to invest in new technologies and services, ensuring its leadership in Kenya’s telecommunications market.
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