Safaricom to double 4G sites as net profit grows to $624.9 million

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Safaricom (NSE: SCOM) has announced plans to double its 4G network coverage to 5000 base stations by March 2020, covering all major towns and 80 per cent of the Kenya population.

The announcement was made by the company CEO Bob Collymore as he released financial results for the year ending  March 31, 2019, which saw net income increase by 14.7 per cent  to Ksh63.4 billion (USD624.9 million ) with revenue hitting Ksh240.3 billion (USD2.4 billion).

“We are pleased with the strong results we have delivered for the year, building on our long track record of delivering relevant products and putting the customer first. We foresee continued growth in the future,” said Collymore.

Safaricom expects to spend over Ksh36 billion (USD354.8 million) in driving up additional 4G coverage, which will see the company roll out an additional 2,030 4G and 4G+ base station to reach more than 80 per cent of the population.

“For a majority of Kenyans, the mobile phone is often the first and only link to the internet. By broadening our 4G coverage to almost anyone in the country, we aim to ensure that no one has to miss an opportunity or get left out because of lack of access to affordable, quality, high-speed broadband, ” said Collymore.

Safaricom became the first to roll out a 4G network in Kenya in 2014, and in June 2017, became the first in East Africa to upgrade a section of its 4G network to 4G+.

4G provides customers with speeds of up to 100 Megabits per second with Safaricom’s 4G+ network supporting double the 4G speeds.

READ:Here is Safaricom’s 30th million customer

Financial performance

During the year under review, the telco’s voice service revenue grew by 0.3 per cent to Ksh 95.9 billion (USD945.2 million ) while M-PESA revenue grew by 19.2 per cent  to Ksh 74.9 billion(USD738.2 million )making the two the largest contributors to revenue.

“Looking ahead, the business will sustain its momentum of investing in the quality of our service and diversification of our revenue portfolio to ensure sustained returns to shareholders,” said Collymore.

Mobile data revenue increased by 6.4 per cent to Ksh38.7 billion (USD381.4 million). Messaging revenue however declined by 1.3 per cent to Ksh17.5 billion (USD172.4 million).

The firm’s fixed service revenue increased by 22.7 per cent to Ksh8.2 billion (USD80.8 million).

Total customer base increased by 7.7 per cent to 31.8 million while 30-day active M-PESA customers increased 10.2 per cent to 22.6 million. On the other hand 30-day active mobile data customers increased 6.6 per cent to 18.8 million.

Safaricom recorded a 13.1 per cent growth in EBIT (Earnings before Interest) to Ksh89.6 billion (USD883.1 million) with an EBIT margin of 35.8 per cent, up 1.9 percentage points Year-on Year. The firm’s free cash flow went up 13.9 per cent to Ksh63.1 billion (USD621.9 million).

The leading telco provides voice, data, financial services and enterprise solutions for a range of customers, small businesses and government, using a variety of platforms with over 200,000 touch points for its customers and over 100 different products under its portfolio.

Listed on the Nairobi Securities Exchange (NSE) and with annual revenues in excess of Ksh200 billion (USD1.9 billion), Safaricom provides over 91 per cent  of Kenya’s population with 4G and 3G coverage and providing 2G coverage to 96 per cent of Kenyans.

Safaricom has harnessed its proprietary fibre infrastructure to build a dedicated enterprise business, which provides managed I.T. services to clients in the East African region.

The firm pioneered commercial mobile money transfer globally through M-PESA, the most successful service of its kind anywhere in the world.  Launched in March 2007, M-PESA now has over 22.6 million active customers and over 162,800 M-PESA Agent outlets countrywide.

ALSO READ:Telcos wars: Telkom, Airtel merge to rival Safaricom

 

Martin Mwita is a business reporter based in Kenya. He covers equities, capital markets, trade and the East African Cooperation markets.

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