A customer prepares to transact on M-Pesa. The volume of M-Pesa airtime top-ups peaked at 38 per cent in the year ended March. PHOTO | FILE
What you need to know:
The volume of M-Pesa airtime top-ups peaked at 38 per cent in the period, having grown from 35 per cent the year before and 22 per cent in the year ended March 2011.
Safaricom is now calling on its airtime dealers and resellers to diversify to other products and services such as M-Pesa agency to grow their business.
Safaricom’s airtime dealers are seeing their commissions squeezed as the volume of top-ups made directly from the telecom operator’s M-Pesa platform outpaces the growth of scratch cards.
While the merchants’ earnings grew 11.5 per cent to Sh10.6 billion in the year ended March, airtime purchase trends show that their share of these transactions is falling steadily.
The volume of M-Pesa airtime top-ups peaked at 38 per cent in the period, having grown from 35 per cent the year before and 22 per cent in the year ended March 2011.
The telco, which has 23.3 million subscribers, attributed the faster growth in airtime purchases via M-Pesa to the convenience offered by mobile money which allows customers to top up any amount at any time from the comfort of their mobile phones.
Safaricom is now calling on its airtime dealers and resellers to diversify to other products and services such as M-Pesa agency, selling devices and SIM cards to grow their businesses.
“M-Pesa enables top ups from the convenience of the handset, which empowers the subscriber to buy credit at times when their usual outlet may be closed or unavailable,” said Sylvia Mulinge, director of consumer business at Safaricom.
“We encourage our dealers to expand their service offering in line with market trends by offering products such as devices or services such as M-Pesa to increase their revenue opportunities,” said Ms Mulinge.
The shrinking share of manual airtime top-ups comes at a time when the number of scratch card sellers has grown significantly, further thinning margins in the business.
Some of the outlets have responded by offering a wide array of telecommunication and financial services including running several banking and mobile money agency business.
Safaricom pays its airtime dealers and retailers a commission based on the value of scratch cards sold. However, direct airtime purchases made from M-Pesa do not attract any sales charges.
Safaricom distributes airtime vouchers countrywide through 485 dealers and 275,000 retailers.
Airtime top-ups via mobile money also help lower costs associated with printing scratch cards, distribution costs and recruiting resellers, Ms Mulinge said.
Safaricom in November 2009 unveiled the Sh5 and Sh10 denomination airtime scratch cards targeted at the mass market.
The telco had earlier in 2006 released Sh50 airtime vouchers. Hitherto, the cards were in values of Sh100, Sh250, Sh500 and Sh1,000. Zain, now trading as Airtel, launched similar low-value cards in 2010.
Voice continues to be the backbone of Safaricom’s business but recorded a paltry four per cent growth to Sh87.41 billion or more than half (54 per cent) of total revenue in the year ended March.
Safaricom’s voice traffic was 6.28 billion minutes in the period under review, giving the telco a market share of 72 per cent in the competitive highly and lucrative voice market.
Non-voice sales grew by a third to hit Sh68.8 billion or 42 per cent of total revenue, driven by data and M-Pesa. Devices and other revenue contributed four per cent of total revenue.
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