What Will Make Telecommunications Company Safaricom Tick In 2023?

By Juma / Published January 20, 2023 | 2:08 pm




KEY POINTS

The value of mobile transactions in the 11 months to November last year hit 7.2 trillion shillings, representing a 15 percent growth compared to the 6.24 trillion shillings recorded in a similar period in 2021 with over 90 percent of it being via M-Pesa.


Safaricom

KEY TAKEAWAYS


Kenyans borrowed an average of 1.6 billion shillings from Fuliza, Safaricom’s M-Pesa overdraft during the first 6 months of 2022.

In 6 months to June 2022, Fuliza disbursed 290 billion shillings up from 220.38 billion shillings disbursed in the same period last year. This means Kenyans were borrowing about 66,666,666 shillings per hour from Fuliza in the past 6 months.


Safaricom is a giant. Let us face it. It is one telecommunications company whose roots are so deep within and without Kenya that we cannot afford to lose or see it going down even with an iota. It is too important to let go.

As the year kicks off, many investors are looking for companies they can invest in, and of course, Safaricom pops up among their top options. Safaricom, being a name that everyone knows and associates with comes with an unwritten trust that only those with a third eye can see.

Soko Directory analyzed and came up with five reasons that will make Safaricom tick this year and a reason enough for those looking to invest to channel their funds. This piece does not inform investor choices but gives reasons as to why we the giant come out as a good option.

Related Content: Breaking Down Old Mutual’s Unit Trusts And Why They Should Inform Your Investment Plan For 2023

According to our analysis, here is what will make Safaricom tick in 2023:

Taxes and Revenue

Safaricom, in the financial year ending March 2022, remitted 124.7 billion shillings in duties, taxes, and license fees to the government. This payment increased the total duties, taxes, and fees paid by Safaricom since its inception to 1.04 trillion shillings. This excludes the dividends that government receives for its 35 percent stake in the telco.

Coming at a time the government of Kenya is pushing every avenue that can net in more taxes and revenues, Safaricom remains the largest taxpayer and revenue earner for the government of Kenya, hence contributing to the trickling-down benefit effect down the value chain.

And with the government seeking to link the Kenya Revenue Authority (KRA) to the M-Pesa systems, the contribution of Safaricom as a whole, plus the more than 30 million M-Pesa users will be momentous and something the government will have to guard with envy.

Related Content: Safaricom Reverses The Bonga Points Expiry Plan

M-Pesa

The value of mobile transactions in the 11 months to November last year hit 7.2 trillion shillings, representing a 15 percent growth compared to the 6.24 trillion shillings recorded in a similar period in 2021 with over 90 percent of it being via M-Pesa.

Between March 2020 and October 2022, active mobile money users have risen by 6.2 million while the monthly volume and value of Person-to-Person transactions increased from 162 million transactions worth 234 billion shillings to 440 million transactions worth 399 billion shillings. This represents an increase of 171 percent and 71 percent respectively.

M-Pesa virtually cuts across the economy and almost all other sectors depend on it. M-Pesa has been quoted as the reason Kenya has been leading in financial inclusion for more than 10 years. The company continues coming up with different interesting features.

Currently, all Kenyan commercial banks have integrated M-Pesa into their systems for customers to deposit funds to their bank accounts and withdraw from their bank accounts to their M-Pesa wallets without visiting branches.

Soko Directory, however, sees the idea of separating M-Pesa from Safaricom so that both can be standalone businesses as not a very good idea.

Related Content: Safaricom Launches M-PESA Go For 10 To 17-Year-olds

Fuliza

Fuliza has received both praise and condemnation in equal measure. However, this is one of the products by Safaricom that clicked and hit the table from the moment it was launched and Kenyans have never had enough.

Fuliza is an overdraft by Safaricom’s M-Pesa that gives customers an opportunity to continue with their transactions even when their M-Pesa balance is zero. Initially, it was meant for payment of products and services only.

But now, Fuliza customers can withdraw their Fuliza at an M-Pesa agent just the same way they do for normal M-Pesa transactions. Fuliza, despite other competitors like “Hustler Fund”, will continue making Safaricom tick and big.

Kenyans borrowed an average of 1.6 billion shillings from Fuliza, Safaricom’s M-Pesa overdraft during the first 6 months of 2022.

In 6 months to June 2022, Fuliza disbursed 290 billion shillings up from 220.38 billion shillings disbursed in the same period last year. This means Kenyans were borrowing about 66,666,666 shillings per hour from Fuliza in the past 6 months.

Related Content: Safaricom Introduces New Discounted Tariffs On Fuliza

Share Price and Profits

Safaricom has been often been described as one that makes “crazy profits.” During the release of the April to September financial results, Safaricom announced that its profits after tax dropped from 37 billion shillings to 30.2 billion shillings.

This was a 6.8 billion shillings drop and becomes the lowest profits the telco has reported in a half-year period over the past four years. The drop was however justified following the entry of Safaricom into Ethiopia, another huge investment.

Safaricom’s revenues, however, grew marginally from 146.368 billion shillings in the first half of 2021 to 153.4 billion shillings in the six months to September, a 4.8 percent growth. And this year seems even better.

On share price, although towards the end of the week, the price seemed to fall to a low of 20, this is not the first time the Safaricom share price has always rebounded and nothing has ever kept it down as compared to other players.

Related Content: Safaricom Extends Ksh.1.5 Million to Support Sol Generation’s D.O.P.E Campus Tour

Investing in people

Safaricom, through Safaricom Foundation, has been working with its partners to improve the lives of Kenyan communities. The Safaricom Foundation has supported the implementation of projects in a broad range of areas – Economic Empowerment, Education, Environmental Conservation, Health, Water, Arts, Music and Culture, Sports, and Disaster Relief.

The Foundation supported 59 economic empowerment projects, totaling 67 million shillings. These funds went towards supporting organizations and communities to implement projects in income generation, food security, employment creation, and skills transfer through vocational training. The projects ranged from small-scale community initiatives to larger-scale nationwide initiatives.

With the aim of providing quality education to Kenya’s children, the Foundation has constructed and equipped libraries and laboratories in schools. The Foundation invested in infrastructural development and the provision of specialized learning equipment for special schools and schools in extremely marginalized areas. The Foundation supported 60 education projects, totaling 81 million shillings.

The Foundation has also supported the environment, and health among others. This year will not be different.

Related Content: Safaricom Foundation’s 3-Year Maternal Health Project in Lamu Benefits Over 33,000 Women




About Juma

Juma is an enthusiastic journalist who believes that journalism has power to change the world either negatively or positively depending on how one uses it.(020) 528 0222 or Email: info@sokodirectory.com

View other posts by Juma


More Articles From This Author








Trending Stories










Other Related Articles










SOKO DIRECTORY & FINANCIAL GUIDE



ARCHIVES

2023
  • January 2023 (160)
  • 2022
  • January 2022 (293)
  • February 2022 (329)
  • March 2022 (359)
  • April 2022 (294)
  • May 2022 (271)
  • June 2022 (232)
  • July 2022 (278)
  • August 2022 (253)
  • September 2022 (246)
  • October 2022 (196)
  • November 2022 (231)
  • December 2022 (166)
  • 2021
  • January 2021 (182)
  • February 2021 (227)
  • March 2021 (325)
  • April 2021 (259)
  • May 2021 (285)
  • June 2021 (273)
  • July 2021 (277)
  • August 2021 (232)
  • September 2021 (271)
  • October 2021 (305)
  • November 2021 (364)
  • December 2021 (249)
  • 2020
  • January 2020 (272)
  • February 2020 (310)
  • March 2020 (390)
  • April 2020 (321)
  • May 2020 (335)
  • June 2020 (327)
  • July 2020 (333)
  • August 2020 (276)
  • September 2020 (214)
  • October 2020 (233)
  • November 2020 (242)
  • December 2020 (187)
  • 2019
  • January 2019 (251)
  • February 2019 (215)
  • March 2019 (283)
  • April 2019 (254)
  • May 2019 (269)
  • June 2019 (249)
  • July 2019 (335)
  • August 2019 (293)
  • September 2019 (306)
  • October 2019 (313)
  • November 2019 (362)
  • December 2019 (318)
  • 2018
  • January 2018 (291)
  • February 2018 (213)
  • March 2018 (275)
  • April 2018 (223)
  • May 2018 (235)
  • June 2018 (176)
  • July 2018 (256)
  • August 2018 (247)
  • September 2018 (255)
  • October 2018 (282)
  • November 2018 (282)
  • December 2018 (184)
  • 2017
  • January 2017 (183)
  • February 2017 (194)
  • March 2017 (207)
  • April 2017 (104)
  • May 2017 (169)
  • June 2017 (205)
  • July 2017 (189)
  • August 2017 (195)
  • September 2017 (186)
  • October 2017 (235)
  • November 2017 (253)
  • December 2017 (266)
  • 2016
  • January 2016 (164)
  • February 2016 (165)
  • March 2016 (189)
  • April 2016 (143)
  • May 2016 (245)
  • June 2016 (182)
  • July 2016 (271)
  • August 2016 (247)
  • September 2016 (233)
  • October 2016 (191)
  • November 2016 (243)
  • December 2016 (153)
  • 2015
  • January 2015 (1)
  • February 2015 (4)
  • March 2015 (164)
  • April 2015 (107)
  • May 2015 (116)
  • June 2015 (119)
  • July 2015 (145)
  • August 2015 (157)
  • September 2015 (186)
  • October 2015 (169)
  • November 2015 (173)
  • December 2015 (205)
  • 2014
  • March 2014 (2)
  • 2013
  • March 2013 (10)
  • June 2013 (1)
  • 2012
  • March 2012 (7)
  • April 2012 (15)
  • May 2012 (1)
  • July 2012 (1)
  • August 2012 (4)
  • October 2012 (2)
  • November 2012 (2)
  • December 2012 (1)
  • 2011
    2010
    2009
    2008
    2007
    2006
    2005
    2004
    2003
    2002
    2001
    2000
    1999
    1998
    1997
    1996
    1995
    1994
    1993
    1992
    1991
    1990
    1989
    1988
    1987
    1986
    1985
    1984
    1983
    1982
    1981
    1980
    1979
    1978
    1977
    1976
    1975
    1974
    1973
    1972
    1971
    1970
    1969
    1968
    1967
    1966
    1965
    1964
    1963
    1962
    1961
    1960
    1959
    1958
    1957
    1956
    1955
    1954
    1953
    1952
    1951
    1950