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Safaricom goes all out on network, fibre

Company spent Sh18 billion to roll put additional 732 sites (4G) in the period

In Summary

•During the release of half-year results for the period ending September 31, Safaricom interim CEO Micheal Joseph has said the firm's focus in the next months would be on network and infrastructure growth in the grassroots areas.

•The number of homes connected to fibre rose to 114,700 from 79,400 in same period last year. Businesses connected to fixed data links also increased to 21,600 from 18,600 year over year.

Safaricom Chief Executive Officer (CEO) Michael Joseph flanked by Safaricom chairman Nicholas Ng'ang'a addresses an investor briefing at their headquarters in Nairobi, Kenya November 1, 2019.
Safaricom Chief Executive Officer (CEO) Michael Joseph flanked by Safaricom chairman Nicholas Ng'ang'a addresses an investor briefing at their headquarters in Nairobi, Kenya November 1, 2019.
Image: REUTERS

Safaricom PLC is set to increase investments in 4G network and internet connection packages in homes and businesses towards the end of their financial year.

During the release of half-year results for the period ending September 31, Safaricom interim CEO Micheal Joseph has said the firm's focus in the next months would be on network and infrastructure growth in the grassroots areas.

Over the six months, the telecommunication accelerated 4G rollout in the country, adding an additional 732 sites in the period, increasing our number of 4G sites by 50 per cent and expanding our coverage to 63 per cent.

 
 

The infrastructure addition was made at Sh18 billion, one billion shillings more than what was spent of the same period last year.

“Our focus has been improving our network and now will focus on providing more 4G sites and an equivalent of even more number will be added in the next three months,” Joseph said.

“Our focus going forward will be on the community and village levels to benefit more people.”

From (L) Safaricom PLC Chief Corporate Security Officer Nicholas Mulila, Safaricom PLC Chief Financial Officer Sateesh Kamath, Safaricom PLC Chief Human Resource Officer Paul Kasimu and Safaricom PLC CEO Michael Joseph interact during the Safaricom 2019/2020 Half Year results announcement at the Michael Joseph Centre today.
From (L) Safaricom PLC Chief Corporate Security Officer Nicholas Mulila, Safaricom PLC Chief Financial Officer Sateesh Kamath, Safaricom PLC Chief Human Resource Officer Paul Kasimu and Safaricom PLC CEO Michael Joseph interact during the Safaricom 2019/2020 Half Year results announcement at the Michael Joseph Centre today.
Image: COURTESY

The investments can be attributed to the 14.4 per cent increase in net profit to Sh35.65 billion over the period.

While announcing the results, Safaricom chief finance officer Sateesh Kamath said this was driven by an increase in service revenue growth by 5.3 per cent to Sh124.32 billion.

Mobile data revenue increased by four per cent to Sh19.78 billion while fixed service revenue increased by 18.4 per cent to KS4.55 billion.

M-PESA revenue grew by 18.2 per cent to Sh41.97 billion.

 

However, income from calls made by mobile subscribers declined 1.4 per cent to Sh46.87 billion while messaging revenue also declined by 11 per cent to Sh8.60 billion.

Over the period, fibre to the home (FTTH) grew by 11.1 per cent, representing 60 per cent of total contribution to fixed revenue growth.

Fibre to the business (FTTB), was the second biggest contributor at 5.6 Per cent.

The number of homes connected to fibre rose to 114,700 from 79,400 in same period last year.

Businesses connected to fixed data links also increased to 21,600 from 18,600 year over year.

“We still see future opportunity in converged service of data, content, smart home and fixed-mobile. This is expected to drive up future average revenue per user (ARPU) in the medium to long term,” Kamath said.

“I am pleased to note that we are on track to delivering our promise of covering every town in Kenya with 4G by the end of this year.”

The firm registered a 33.3 per cent growth in customers using more than 100 MBs per month, and a 70.8 per cent growth in active 4G devices.

The investments however saw a decline free cash flow by 2.8 per cent year on year for the period.

“Our capex intensity continues to reduce, however it still remains above industry standards as we strive to provide the best technology to our customers. This impact is expected to relax fully in the second half of this year,” Kamath added.