Telecommunications firm Safaricom will forego Sh500,000 in its bid to woo more people to use its M-Pesa money transfer service as it tries to ward off competition in the mobile money segment that is increasing heating up.
The telco on Friday said it would scrap fees charged for M-Pesa fees charged when sending or using the Lipa Na M-Pesa service for transactions under Sh100.
Bob Collymore, Chief Executive, Safaricom, said the scrapping of the fees would enable the firm increase the number of people using the service. He also expects to further deepen financial inclusion, noting increase use of the service would draw people to start saving and borrowing using mobile money.
“We have reviewed charges for person-to-person and Lipa Na Mpesa transactions under Sh100. Under the ‘M-Pesa Kadogo’ it will be free to send value of Sh100 and below,” said Collymore.
“This is informed by the objective to deliver our financial inclusion agenda, which remains at the core of our strategy to transform lives. It is also in response to our customers’ feedback.”
“Our cashless platform, Lipa na M-PESA, has been well received among enterprises. We had over 50,000 merchants who were active on a 30 day basis as at end of September 2016.”
Collymore spoke when the firm release its financial results for the six month period ending September 30. During the half, the company reported a 32 per rise in its net profits to Sh23.9 billion during the first half of its 2016/2017 financial year. This is in comparison to Sh18 period over a similar period last year.
The telco’s total revenue for the period reached Sh102 billion up from Sh97 billion over the previous half. Revenues from its core services such as voice, data, messaging and mobile money grew 15 per cent to Sh98 billion during the half compared to Sh84.9 billion compared to a similar period last year.
And for the first time, revenues from non-voice services such as mobile money and data overtook revenues from what has traditionally been the company’s bread and butter.
Out of the Sh98 billion, Sh52 billion was from the non-voice revenue stream while voice service brought inSh45.7 billion. Mobile data revenues grew 46 per cent to Sh13 billion while M-Pesa revenues went up 33 per cent to Sh25 billion.
“A majority of our revenue, for the first time, is represented by our non-voice revenues. We attribute this to a growing appetite for data,” said Collymore.
During the half, Kenyans transacted Sh3.2 trillion through M-Pesa. The transactions include cash deposits and withdrawals, money transfers, airtime purchases and Lipa Na M-Pesa.
The firm paid Sh42.93 billion in duties, taxes and license fees during the half year.
The firm said it expects the next half to be equally good and said it would heavily focus on increasing usage of mobile data. It is currently running a campaign to get mobile subscribers to use its 4G network, which it said is accessible in 30 counties.
“Mobile data is our fastest growing revenue stream, and we will focus on increasing the numbers of 3G and 4G smartphones on our network through launching more 4G (LTE) sites and offering affordable smart devices. We will continue with our fibre rollout to homes that will enable us to offer high speed internet and data,” said Collymore.