Safaricom’s Strong Financial Performance Driven by M-PESA and GSM
Safaricom, Kenya’s leading telecommunications provider, reported a robust revenue increase of 13.4% to KSh 335.3 billion ($2.5 billion). M-PESA, its flagship mobile money product, contributed significantly, accounting for 42.4% of total revenue at KSh 140 billion, while GSM services made up 52.7% at KSh 173.9 billion (over $1 billion).
Challenges Amid Growth: Outages and Recovery
Despite its financial success, Safaricom faced challenges, experiencing service outages twice in January 2024 and July 2023, which impacted key functionalities of M-PESA at the time.
Steady Growth in Net Income
The group’s net income, excluding minority interests, saw a moderate increase of 1.2%, while Safaricom Kenya’s net income surged by 13.7%. In August 2023, Safaricom announced plans to raise M-PESA account and daily transaction limits to support Kenyan SMEs.
Expanding Footprint in Ethiopia
Safaricom made significant strides in Ethiopia, doubling its active customer base to reach 4.4 million. The CEO highlighted the company’s success in the region, emphasizing that its network in Ethiopia is nearly half the size of Kenya’s. Safaricom’s performance in Ethiopia aligns with its license obligations, with 90% of the Safaricom Ethiopia team comprising Ethiopians.
Future Growth Prospects
Looking ahead, Safaricom expects Ethiopia to become a significant growth contributor at the group level by 2025, despite the initial startup costs. The CEO emphasized the company’s vision of becoming a purpose-led technology company and highlighted investments in new technologies to enhance efficiencies and customer engagement.
Diversification Efforts and Partnership with Visa
In December 2023, Safaricom expanded its service offerings beyond mobile money through a partnership with Visa M-Pesa GlobalPay Visa virtual card, enabling tap-to-pay card payments. This move reflects Safaricom’s commitment to diversifying its offerings and enhancing customer convenience.