M-Pesa boosts numbers for Vodacom Tanzania
M-Pesa revenue has reported an increase of 7.4% to contribute 35.0% to service revenue for Vodacom Tanzania, up 2.2pp, driven by increased transactions per customer, according to the operator.
In a presentation of its preliminary financial results for the year ended 31 March 2020, the company claims to have secured 32.8% of the market after increasing its customer base by 1.4 million to 15.5 million customers.
Managing Director for Vodacom Tanzania Hisham Hendi said: “M-Pesa continues to deliver on its promise of delivering financial inclusion in Tanzania … We now have 10.1 million customers using the service, processing 1.4 billion transactions worth TZS 58.1 trillion in the mobile money system during the year.”
He added: ‘We made considerable progress in the past the year in prioritising financial inclusion through our mobile money platform, M-Pesa, while enabling a digital society through connectivity. This included introducing an affordable $25 smart-feature phone, offering more M-Pesa services such as our overdraft product as well as expanding our international remittance portfolio, supported by continuous investment in the network. These efforts will further support the increasing demand for data and M-Pesa services by our customers, and expected to be the strong driver for growth in future. We have revamped our digital services with the aim of providing customers with more services through digital platforms and build a diverse revenue stream.’
Hendi attributed service revenue growth of 0.9% to solid commercial execution supported by strong customer growth.
He added that the lower growth in the second half of the year was mainly as a result of the barring of 2.9 million non-biometrically registered customers and the associated compliance costs as well as intense competitive pricing pressure.
The company’s financial report shows data revenue growth of 9.8% contributing 17.7% to service revenue, up 1.5pp, supported by the strong demand for mobile data services, investment in the data network and increased smartphone penetration in the country.
Commenting on the outlook for the year, Hisham said, ‘Following the COVID-19 pandemic that is affecting nations and citizens all around the world, Vodacom Tanzania’s priority is around health and safety of our employees while continuing to deliver services and support to our customers as well as assist the government where possible, to cope with the COVID-19 situation. We continue to closely monitor the latest guidance from the World Health Organisation as well as local health authorities and have well developed business continuity plans in place for dealing with such events. We expect the COVID-19 pandemic to have an impact on our operational and financial performance, particularly in the first half of the year.”
Vodacom’s Safaricom pact
At the same time the Vodacom Group delivered its annual results for the year ended 31 March 2020 and emphasised the value of its investment in Safaricom to bolster its international portfolio.
Shameel Joosub, Vodacom Group CEO, said, “Our investment in Safaricom, Africa’s second biggest telco by market capitalisation after Vodacom, delivered a 30.4% boost in profits from this associate, with growth bolstered by currency factors and inclusion of the new M-Pesa joint venture. Significant investments in network and infrastructure, an acceleration in pricing transformation and a 17.2% underlying increase in revenue from M-Pesa, all contributed to Safaricom’s success. Having expanded the M-Pesa ecosystem, customers in our International markets, including Safaricom, now process more than US$14.7 billion a month in transactions through the platform. We currently have 40 million customers transacting on M-Pesa across all our operations, generating total revenue of R16.2 billion and growing at 22% a year.