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Wednesday, Jul 17th

Safaricom's Fuzila helps company rake in KES60-billion profit

Safaricom's Fuzila helps company rake in KES60-billion profit

Safaricom's mobile overdraft service, Fuliza, which allows users to access funds even when their mobile money wallet is depleted, has experienced significant growth, the telco says, having released Kshs 45-billion since its launch in January 2019.

"We launched Fuliza after realising that customers were cancelling millions of M-Pesa transactions every day due to insufficient funds in their mobile wallets," said Safaricom chief executive officer Bob Collymore in a presentation of the company's full year 2019 financial report announcement

Collymore said this has resulted in a 19.2% increase in M-Pesa use and Kshs 74.99-billion revenue generated.

According to a company statement of the results: "The growth in M-Pesa has been driven by an increased number of users, higher velocity of funds within the ecosystem, and adoption of new use cases. In the period, we added 2.1 million active M-Pesa (user)."

"M-Pesa now accounts for 31.2% of service revenue, further accelerating displacement of traditional voice and messaging services," the company added.

Safaricom's results showed that mobile data revenue increased by 6.4% to post Kshs 38.69-billion in the same year, while voice service revenue grew by 0.3% to record a Kshs 95.94-billion income.

"Mobile data revenue increased by Kshs 2.33-billion on an absolute basis, and continued to witness a slow-down in the growth rate from the first half of the year, growing at 6.4% for the full year," it explained.

"The slow-down in growth reflects both competitive conditions in the market and increased taxation that was absorbed for in bundle customers. Mobile data is now 16.1 percent of service revenue."

The company has kept its momentum to extend its fibre reach. It currently has 6,700 kilometres of fibre up from 5,000 recorded last financial year.

The company has now passed 300,000 homes from 144,000 homes as recorded in last year's report.

Its 4G coverage also grew by 57% from the previous 35% growth and its 4G base stations number stands at 2,791.

Total net profit for the company stood at Kshs 63.4-billion, compared to Kshs 55.9-billion in last year's financial report. Total revenue stood at Kshs 240.3-billion.

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