M-Pesa displaces phone calls as Safaricom's biggest revenue earner

Safaricom’s mobile money platform M-Pesa is now the telco’s biggest revenue earner having displaced voice (or phone calls) for the first time in six months through to September 30.

The pair of revenue earning streams were tied on the neck in the year ended March with an equal contribution of Ksh.82.6 billion to service revenue or an equivalent 33 per cent.

Six months later, M-Pesa now contributes 37.8 per cent of Safaricom’s revenue while the share of voice has fallen to 29.9 per cent.

In the six-month period, M-Pesa grossed Ksh.52.3 billion in contrast to voice revenue at Ksh.41.1 billion.

Data revenue came in at a distant third place earning Ksh.23.6 billion for the telco while fixed enterprise and fibre to the home (FTTH) grossed Ksh.3.5 billion and Ksh.2 billion respectively.

M-Pesa earnings rose by 45.8 per cent year on year or by Ksh.16.4 billion driven primarily by the return of charges for transactions valued at Ksh.1,000 or less.

Payments meanwhile grew by 50.7 per cent with transactions of Lipa na M-Pesa (LNM) jumping by 83.6 per cent while betting transactions doubled in the period.

Between April and September this year, the value of M-Pesa transactions grew by 51.5 per cent to Ksh.3.7 trillion, 18 per cent of which represents zero-rated transactions (deals under Ksh.100 which are not charged).

The volume of M-Pesa transactions meanwhile rose by 42 per cent to reach 7.8 billion individual transactions.

Safaricom now has 258,000 one month active M-Pesa agents while the number of one month active merchant tills stand at 387,000.

As earnings from voice dwindle, Safaricom says it will focus on driving up use cases for mobile money and data even as it still views voice revenues as paramount to operations.

“Realizing that voice will be under pressure, we have focused on growing data at a much faster rate than the decline in voice. Going forward, we believe mobile data whose penetration rate remains low has the opportunity to outway the decline that we would see on voice,” Safaricom Chief Finance Officer Dilip Pal said on Wednesday.

“We are still passionate about defending our voice since it is where everything started for us (Safaricom). We understand that gradually, people will move to the online space but voice will not be done away with.”