East African Business Week (Kampala)
Cedric Lumiti
7 November 2009
Nairobi — Safaricom braved rising competition in the telecoms sector to post a 6.7% increase in profit after tax to $89.3 million (KSh6.6 billion) for the six months ending September 2009.
The company's Chief Financial Officer Chris Tiffin attributed the results to the roll out of innovative products and increased infrastructure investments which during the period stood at $113.3 million (KSh8.5 billion).
"Our profit before tax grew by 1.7% to $120 million (KSh9.13 billion). We recorded double digit growth in revenue to Sh40.7 billion," he said.
"Although voice revenues only increased by 6.2 percent to $421.3 million because of the reduction in tariffs," he explained.
He said revenues went up by 93.6% to $96 million (KSh7.2 billion) due to the growth of broadband mobile services and the money transfer service, M-Pesa which in September alone transferred a total of $300 million (KSh22.5 billion).
Although the company's market share had declined marginally to 77%, its control of the revenues in the market increased to 83%.
Their customer base grew by 1.25 million during the period bringing their subscriber base to 14.5 million.
"We are now positioning ourselves to be a big data operator and expect the segment to contribute about 25% of their revenues in the next three years," said the company's Chief Executive Officer Michael Joseph while releasing the company's half year results to investors in Nairobi, Kenya.
"If you just took 25% of the revenue and said it's on pure internet access, we would have to own another cable," he said in reference to The East African Marine System (TEAMS) cable in which they own 19.5%.
He disclosed that they were in the process of finalising the purchase agreement for the acquisition of a WiMAX service provider Packet Stream Data Network, which upon completion will allow the company to roll out a national fixed data service.
He also attributed the success to the extension of their 3G network and acquisition of data service companies.
Kenya's Information Minister Samuel Poghisio said government would ensure a fair regulatory regime for all the telecommunication industry players."We are to facilitate but not hindering growth by implementing relevant policies," the Minister said. Growing from its cradle in mobile voice services, Safaricom has evolved into a total telecoms company.
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