Safaricom dials up customer numbers as it sets sight on next strategy of growth

Written by Oral East Africa

Safaricom Kenya witnessed its largest growth of customer numbers over the last five years recording a 7.2 percent jump in the growth of its ranks, as the company sets sights on transforming itself and integrating into the everyday lives of the 37.1 million Kenyans.

In its latest financial report, the Telco posted a 7.27 per cent growth in net profit to Kes45.76 billion for the year ending March 31, 2025, up from Sh42.7 billion last year on the back of growth across all platforms as its customer base surged.

Safaricom is shaping up to be the most ubiquitous companies in Kenya integrated into every home and business as the portal into technology for operations, payments, and investments as well as how they interface with government to pay for services and taxes.

Over the next five years Safaricom wants over a million more homes and businesses plugged into their fiber, wireless and satellites, onboarding millions onto 4G technologies by lowering the cost of getting a mobile phone; and use Artificial Intelligence to turbocharge its M-Pesa arm into a savings, banking and insurance digital conglomerate with incredible reach and scale.

It has ambitious plans to grow into Africa’s leading firm of such magnitude with its growing footprint in Ethiopia, the continent’s second most populous country, where its first regional foray has gained it 7.25 million, one-month active customers.

Outgrowing costs

Safaricom have seen the value of large numbers, that helped it absorb the drop in revenues from the drop in Mobile Termination Rates (MTR) changes from Kes0.58 to Kes0.41 effective 1 March 2024.

Larger numbers also meant a 1.6 percent growth in the voice business to Kes80.7 billion. Voice was the foundation of the company when it began but has since lost ground to mobile money that has continued to dominate the company earnings.

Mobile money which Safaricom now sees as its Financial Services arm accounted for 44.2 percent of their service income up from 42.4 percent last year. Meanwhile connectivity business share has shrunk to 50.8 percent down from 52.7 percent last year.

Increased use pushed up M-Pesa Revenues 15.2 percent to Kes161.1 billion while data use earned the firm Kes72.8 billion under the wave.

Dividend party in uncertainty

Safaricom is scaling rapidly Ziidi new Financial services product has gained 1.5 million opt-ins, while its device insurance has signed up 411,000 Policies. Its new billing system that automates customers recurring payments has acquired 2 million customers while its credit solutions Fuliza, Merchant Term loans & Merchant Overdraft are already dominating those markets.

With such a solid performance Safaricom recommended a final dividend of Kes0.65 per ordinary share, which is in addition to an interim dividend of Kes0.55, will bring the total dividend to Kes1.20 per share for the year and the total payout of Kes48.08 billion.

But size and integration with the economy at such a macro level have its dangers. The company sees Kenya going through increased fiscal pressure that could hit consumers with uncertain tax regimes; add high energy prices and you get disposal incomes coming under pressure and consumers leaving puncturing its numbers. Inflationary times are risky to consumer businesses since tight spending culls discretionary items first.

Safaricom also says they expect interest rates to remain high despite the easing of monetary policy which signals higher costs for the company and the businesses it wants to grow into. Higher forever interest rates are threatening the very survival of many firms and scaring bankers from lending which in a self-fulfilling cycle, is leading to more defaults and a downward spiral.

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