Safaricom customers are spending the largest amounts on its M-Pesa mobile platform than any other most commonly used service, says the company’s disclosure of its revenue mix.
The monthly average revenue per user (ARPU) on M-Pesa increased to Sh305.37 in the year ended March, representing an 18.9 percent jump from Sh256.74 the year before.
The telco says a return to charging on small transactions helped raise revenues from the financial services platform.
The Central Bank of Kenya (CBK) waived fees on M-Pesa transactions of up to Sh1,000 between March 16, 2020, and December 31, 2020. The scrapping of the charges was done to reduce the use of cash following the outbreak of the Covid-19 menace and also to offer financial relief to consumers.
The number of chargeable transactions subsequently increased 16.6 percent to 20.25 in the review period from 17.36 a year earlier, reflecting the impact of ending the waivers.
What customers are now spending on M-Pesa transactions rivals what they incur to run their bank accounts.
A recent study by research and advocacy firm Financial Sector Deepening (FSD) put the cost of running a bank account including making withdrawals and ledger fees at an average of Sh368.25 a month.
Safaricom has disclosed that M-Pesa is its single most profitable service, contributing Sh50 billion in pre-tax earnings or nearly half of its consolidated income.
The telco is keen on growing the platform’s ARPU by increasing its uses to new areas such as insurance and investments and adding more customers. One month active M-Pesa customers rose 7.8 percent to 30.53 million.
Safaricom’s customers have continued to cut what they are spending on voice calls, incurring an average monthly bill of Sh248.91 on the service in the review period.
This was down 3.4 percent from Sh257.72 the year before. The voice business has matured and is expected to decline in the coming years amid increased competition from other forms of communications including social media and internet-based apps such as WhatsApp.
Safaricom has been running promotions to grow usage of the service whose customer base increased 3.1 percent to 28.38 million.
The monthly ARPU on mobile data increased 10.4 percent to Sh205.73 amid promotions and a jump in users to 25.22 million from 23.77 million. More mobile data customers are expected to shift to fixed internet connections in the coming years.
Customers spent the least amount on messaging services at Sh41.71 per month, marking a 20.9 percent decline from Sh52.74. Those using the SMS services rose 2.2 percent to 22.27 million.
The telco offers SMS as a standalone service and also as a bundle in combination with others like voice.
Safaricom customers spent an average of Sh2,300 per month on fibre to the home (FTTH) internet service which has the lowest uptake but is set to grow significantly in the future.
This represented a marginal rise from Sh2,275 a year earlier. Customers subscribing to the internet service jumped 20.8 percent to Sh165,981, partly due to working from home arrangements and the growth of online gig work. Overall, Safaricom customers’ average monthly spend on its services increased 5.1 percent to Sh725.04 in the review period.