Connecting Africa is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 3099067.

Business of Tech

Safaricom profit rises in Kenya, Ethiopia startup costs impact group

Article Image
Kenyan-based operator Safaricom reported strong earnings in Kenya for the year ended March 31, 2024, and believes its Ethiopian business will start being a significant growth contributor from 2025 onwards.

Safaricom Group reported revenue growth of 13.4% to 335.4 billion Kenyan shillings (US$2.53 billion) for the year, as its home market helped cushion costs incurred in the emerging Ethiopian business.

Safaricom's fintech service, M-Pesa, contributed 42.4% of total revenue, at KES140 billion ($1 billion), and the GSM business contributed 52.7%, at KES173.9 billion ($1.31 billion).

"We are extremely pleased with what we have been able to achieve as a group despite the significant startup costs in our Ethiopia business. We expect that from 2025, Ethiopia will start being a significant growth contributor at group level for both top and bottom line," Safaricom CEO Peter Ndegwa said.

Safaricom, which is partly owned by South Africa's Vodacom and UK-based Vodafone, said earnings before interest and tax (EBIT) had reached KES139.9 billion ($1 billion) in Kenya, making it the first company in the region to pass the billion-dollar mark.

At a group level, incorporating the startup costs and investments in Safaricom Ethiopia, the group closed at an EBIT of KES94.9 billion ($716.5 million), a 3.5% growth year-on-year (YoY).

"This performance was driven by customer segmentation, public sector digitization, investments in new technologies and better use of data and analytics to understand and serve customers better," the group said.

EBIT indicates operating profits and is a measure of how efficiently the management has been utilizing investor funds.

Safaricom's earnings in Kenya helped cushion costs incurred in the emerging Ethiopian business.   (Source: Safaricom results statement for the year ended March 31, 2024)
Safaricom's earnings in Kenya helped cushion costs incurred in the emerging Ethiopian business.
(Source: Safaricom results statement for the year ended March 31, 2024)

Ndegwa spoke during the results announcement in Nairobi and said that the company's vision of being a purpose-led technology company was a key factor in investment in new technologies that have enabled creating more efficiencies and better customer engagement.

"We are able to anticipate and serve our customers more intuitively, while engaging our communities to solve their societal challenges. As a result of our razor-sharp focus on our customers, we are now a billion-dollar business in Kenya," Ndegwa noted.

Overall group customers grew 6.8% YoY to 49 million while one-month active customers grew by 9.1% YoY to 37.7 million. Safaricom Kenya also grew its total customer base to 44.7 million.

Listed on the Nairobi Securities Exchange, Safaricom provides connectivity across 2G, 3G, 4G and 5G in aggregate, covering over 99% of Kenya's population.

Ethiopia business grows but faces competition

Safaricom Ethiopia launched in the latter part of 2022, first rolling out in the city of Dire Dawa in August 2022 and then launching its national network in the capital, Addis Ababa, and ten other cities in October 2022.

After about a year and a half in operation, Safaricom Ethiopia had 4.4 million 90-day active customers, and its network in the Horn of Africa nation was currently covering 40% of the population. M-Pesa had 4.5 million registered customers in the country and "is growing rapidly."

"We are hence pleased with commercial momentum in Ethiopia and proud that we have been able to deliver this momentum with a Safaricom Ethiopia team that is 90% Ethiopians," Ndegwa added.

Safaricom became Ethiopia's second operator after a consortium it led was awarded a telecom license in May 2021 as part of Ethiopia's strategy to liberalize its telecom sector.

However, competition is incoming after the country launched a tender process for a second independent telecom license in July 2023.

State-owned Ethio Telecom is leading the market with 74.6 million telecom subscribers at the end of December 2023, with 71.7 million mobile voice subscribers and 36.4 million data and Internet users.

Ethio Telecom is also looking for an investor to buy a 45% equity share in the company.

Follow Connecting Africa on our new X account @connect__africa to get the latest telecoms and tech news across Africa.

Safaricom's major investor, Vodacom, will announce its full-year results on Monday.

Yesterday, pan-African operator Airtel Africa reported a revenue dip of 5.3% to $4.98 billion, hit by significant currency devaluations in Nigeria, Malawi, Zambia, and Kenya, despite growing subscribers across the region over the past year.

Related posts:

*Top image is of Safaricom CEO Peter Ndegwa at the results presentation in Nairobi, Kenya. (Source: Safaricom.)

— Paula Gilbert, Editor, Connecting Africa

Innovation hub


Africa can leverage GenAI for economic growth – Microsoft

A whitepaper on generative artificial intelligence (GenAI) and the future of work has found that the African continent, with its young population, can leverage AI to drive economic growth.

Registration opens for Africa Tech Festival 2024

Registration has opened for the 2024 edition of Africa Tech Festival, the continent's leading platform for technology innovators, specialists and thought leaders.

More Innovation hub

Latest video

More videos

Partner perspectives

All Partner Perspectives

Sponsored video

More videos

Follow us on X

Industry announcements

More Industry announcements

Upcoming events

Cyber Revolution Summit
August 9, 2024
Gaborone, Botswana
Africa Tech Festival 2024
November 11-14, 2024
Cape Town, South Africa
More Upcoming events

Africa Tech Perspectives


Uber's Marjorie Saint-Lot on inclusion and sustainability in Africa

Uber's Country Manager for Ghana and Cote d'Ivoire, Marjorie Saint-Lot, shares how the ride-hailing company is approaching public-private partnerships, environmentally friendly initiatives and gender inclusion in Africa.


The 100 most influential African leaders in 2023

A new report from Africa Tech Festival and Connecting Africa puts a spotlight on the top 100 African leaders in the telecoms and technology sector in 2023.


Deep dive into East Africa's tech startup ecosystem

New survey reveals a lack of access to investors, reliance on international VCs and global recession trends as the biggest barriers for East African tech startups to access funds.

More Africa Tech perspectives

Guest Perspectives


How e-mobility could transform Africa's transport sector

By Francis Hook

ICT analyst Francis Hook delves into Africa's e-mobility sector and unpacks the challenges faced locally and the benefits the move to electric vehicles could bring to urban transport systems.


Omdia View: April 2024

By Omdia Analysts

April 2024's telecoms highlights in the Middle East and Africa included a license for Starlink in Ghana, new mobile termination rates in Ethiopia, and 6G trials in Bahrain – that and more in the latest Omdia View.

More Guest Perspectives

Like us on Facebook

Newsletter Sign Up

Sign Up
Tag id test-002