Safaricom, Kenya’s biggest telecommunications operator, has reported a 10% drop in its first-half net income, citing higher cost of living, rapid inflation and an expensive network rollout in Ethiopia.
The company, which is part owned by JSE-listed Vodacom Group, said the income for the reported quarter ended 30 September came in at KSh33-billion (R4.7-billion).
Core earnings, which include interest and taxes, fell 11.5% to KSh51.2-billion, the group said, as revenue from key business lines such as M-Pesa and data services grew at a slower pace.
It also blamed the drop on a cut in the rate it charges other networks for calls to its subscribers in Kenya, sending down revenue generated from calls.
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“It (the price cut) is not inconsequential or trivial … it has a substantial impact on our business,” group CEO Peter Ndegwa said at an investor briefing.
Kenyan businesses were also affected by jitters over a presidential election in August.
Read: Safaricom surges after securing Ethiopia mobile money licence
Still, Safaricom retained its core earnings forecast of KSh87-billion to KSh93-billion, but lowered its outlook for the Kenyan business. — Duncan Miriri, (c) 2022 Reuters