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Safaricom targets the bottom of the pyramid with zero M-Pesa charges

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sf1Safaricom  has launched “M-PESA Kadogo” allowing users who send anything below ($1) KSHs 100 and below to send money for free.

According to the firm, this move will  empower the  mama mbogas, the  small  and the  micro agents who form the  company’s network.This move is also expected to raise the firm’s  revenues  especially from  M-Pesa.

Safaricom saw 30.8% growth  with EBITDA  to Kshs 50.8bn  with a margin of 49.8%.  The firm’s net  income  increased  by  32.4% to Kshs 23.9bn.  Free  cash  flow  of up 111.6% to  20.1bn.

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Safaricom’s M-Pesa   revenue  recorded   a  growth of  33.7% to ksh 25.9bn  driven by  12.2% increase  in   30 day  active  Mpesa  customers  to  17.6m and a  38.4% growth  monthly  usage  per customer  to 9.3 transactions  per month.  The  cashless  platform Lipa  Na M-Pesa has been  received well  among  enterprises  and  significantly contributed   to  the  increase  in  m-pesa  margins.

Mobile  data  has  also been  another  key  driver of the  businesses   net income  which accounts  for 13.7%   of the  service revenue , grew at a  46.3% to kshs 13.4b. This  was mostly driven by  30  day  data  customers  to  14.9m, increased  bundle users  and  smartphone  penetration.

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Safaricom  accounts   this  growth  to  improving  their  network quality with  efforts to increase network  coverage  and  capacity  to ensure   excellent  performance  and  superior  customer  experience.

The  businesses  good  results  has  continued  to   create value  for the  shareholders supported by growth  across all their  revenue   streams  and cost  efficiency.  As   a result, there is  an underlying  EBITDA  margin of   46.5% being  a  2.8ppt improvement   over  the  same  period in the last  financial year.

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During  the  six  months  under review, free  cash  flow  grew  by 111.6% to ksh 20.1bn  improved trading results and completion  of the National police security(NPS) Net Project.

Among  the  priority   strategies   of  safaricom is  continue  to   create value  for  their  stakeholders through  putting  the  needs  of their customers first, providing relevant   products  and  enhancing  excellence  in their operations.They  will  improve  the  customers  experience  through initiatives  such as  expanding the capacity of the call center,increase  the numbers of  3G and 4G  network  through launching more 4G(LTE)  sites  and offering   affordable  smart devices.

 

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