Net profit of Safaricom, Kenya’s biggest telecom operator, in the first half period of 2020, plunged by 6 percent to Ksh33.07 billion with M-pesa revenue dropping the most on account of free transactions to support customers during Covid-19 period.
The results, covering between April and September also saw a dip in revenue from both voice and messaging, despite the period coinciding with rising Covid-19 infections forcing the state to enforce disruptive measures such as curfew and ban on social gatherings, which was expected to help telecoms revenue.
Its counterpart in Nigeria, MTN saw revenue rise by 13 percent in the nine months of 2020 to N975.8 billion, helped by sustained increased earnings in its data, voice, digital, fintech business units.
Irrespective, Peter Ndegwa, Safaricom’s CEO said the performance was “good” given how households and businesses are reeling from the impact of the virus.
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“It has been a good halfyear and we are seeing improvement in the second half. However, we know Covid-19 disruption is not over given the resurgence in infections,” Business Daily, a Kenyan newspaper quoted Ndegwa as saying.
Despite the value of transactions rising by 32.9 percent to Sh9.47 trillion ($86.946 billion), M-pesa revenue dropped by 14.5 percent to Sh35.89 billion about ($329.516 million)
The drop was on account of the decision to zero-rate fees on transactions of Sh1,000 and below to reduce cash handling in Covid-19 environment,
“We have seen increased activity in the M-pesa ecosystem as customers take advantage of the free fees on person to person and Lipa na M-pesa transactions below Sh1,000 and M-pesa wallet to bank and bank to wallet transfers,” said the telco.
However, the telco benefitted from the increased number of people who were working from home to lower risks of contracting the infectious virus.
Mobile data revenue grew by 14.1 percent while fibre to home revenues rose by 47.2 percent.
Safaricom says that uncertainties persist for the full year given the recent surge in infections, the continued zero-rating of M- Pesa transactions of Sh1,000 and how customers will react when charges are reinstated.
