Safaricom looks for new bright spots as M-PESA continues to grow
Safaricom is looking for new growth opportunities as the company matures in the Kenyan market.
The telco’s profits stayed flat at Kes67.4 billion in the twelve months to March 2022 a marginal dip from Kes68.6 billion in a similar period last year.
The company has branched into Ethiopia where it expects to make its first Birr this year following preparations for an official launch.
Safaricom PLC in partnership with Vodacom Group, Sumitomo, and CDC joined hands to invest in Ethiopia.
It has hired 300 workers for its new subsidiary, which will eventually have 1,000 personnel to drive the company’s growth in the market of 112 million people.
The company has also negotiated a tower cell sharing deal with Ethio Telecom to cover a huge chunk of the country’s geography after launch and set up multi-billion data centers.
Since the telcos and their partners were granted a license, they have invested more than $300 million, including establishing the data center, making it the first to make such a huge investment in an Ethiopian project in a short period of time.
Even as Safaricom supports cross-border investment to launch and scale to achieve regional relevance, it plans to leverage mergers and acquisitions, licenses, and partnerships to unlock growth and shape its investment profile.
Read also: Buoyed by Ethiopia market entry, Safaricom shares remain strong
In Kenya, Safaricom is looking for mergers and acquisitions especially in the financial services space to usher in a new phase of growth away from dominant M-PESA, voice, data, and enterprise.
The leading telcos hired Citi Bank’s managing director and head of corporate finance for sub-Saharan Africa, Michael Mutiga the new chief business development and strategy officer driving partnerships mergers, and acquisitions.
Safaricom is targeting its own money market product and insurance outfit that has seen the company apply for licenses at the Insurance Regulatory Authority and the capital markets regulator.
The teclo is also targeting partnerships with existing players leveraging the M-PESA platform and its wide reach to open up new revenue streams.
The company will also scale up new businesses including Digifarm, Internet-of-Things (IoT) and ICT revenues.
Digifarm revenues have doubled to Kes0.4 billion, IoT was up 64 percent to Kes0.5 billion while ICT revenue increased 29 percent to Kes0.4 billion.
New content space posted Kes0.5 billion in earnings in its first year of launch as the company projects the new revenue stream will gain momentum.
Safaricom is currently reliant on M-PESA, which accounts for 38.3 percent of its total revenue at Kes107.6 billion.
It is followed by voice revenue which accounts for 29.6 percent and Mobile data 17.2 percent.