Kenya’s Safaricom M-Pesa —one of Africa’s and East Africa’s largest mobile money service, could be affected by the coronavirus pandemic (COVID-19), as the service provider anticipates its revenue to be hit to almost $51.64 million in the three months from mid-march after it adjusted prices because of the COVID-19 crisis, according to information from Reuters
According to Reuters, the lost revenue which is almost 7.3 per cent of the mobile money service provider annual revenue, will be caused by the removal of all charges on small peer-to-peer transfers to facilitate cashless payments to help to contain the coronavirus pandemic, which has already taken a toll in other crucial sectors of the East African economy.
As one among the region’s and global leader in the industry, the South African and Britain owned company is not worried by the forecast, as the company’s CEO Peter Ndegwa told Reuters, that they anticipate getting back to business.
“When Kenya gets back on track, our business should get back on track. We are in a good place to be able to weather this storm, but our business is linked to how the country comes out on the other side” he said
On May last year, the telecom operator said that its core earnings for the full year rose 13.1 per cent to around $889 million and M-Pesa was the driver of these earnings. Further, the platform revenue jumped 19.2 per cent to account for 31.2 per cent of the operator’s revenue.
M-Pesa, which was launched by Safaricom in 2007, is one of the most popular modes of payments in Kenya. The platform is used to send money, save, borrow and make payments for goods and services
The global pandemic has already infected about 270 people and caused 14 deaths. The government of Kenya has restricted movement of people and expects the nation’s economic growth to halve to 3 per cent this year.
Under an initial 90-day deal with the government, all charges for cash transfers of less than $9.39 have been removed by all operators
Safaricom chief said that the M-Pesa business could benefit from increased usage as customers shun banknotes during the crisis, but cautioned that it was too early to say for certain.
“We are not factoring in any upside until we see how customers cope with this crisis,” he added.
However, the telecom operator chief attests to the pandemic being a catalyst for positivity, highlighting that the coronavirus crisis will present new opportunities in the data business, which Safaricom needs to pick up the slack from declining volumes in traditional mobile telephony.
“People are discovering they can work from home. Education and learning will change. Small businesses are going to learn they can digitize their operations and operate more smartly,” he said.
According to information from Reuters, Safaricom has experienced a surge in data traffic as people work from home and students turn to e-learning services. It has doubled Internet speeds for its fibre customers – about 300,000 homes – and is accelerating the installation of new fibre connections to meet growing demand, the CEO said.