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Africa’s Telecoms Sector may not be Immune from the Commercial Upheavals of Covid-19

After-tax profits at Safaricom fell to Ksh33.07bn in the six months to September from Ksh35.2bn the year before as flagship mobile money service M-PESA and voice revenues declined, even as mobile data usage increased. The scrapping of charges for M-PESA transactions under Ksh1000 in a bid to reduce physical transactions amid the pandemic led M-PESA revenue to decline 14.5% year-on-year. The firm said it had enabled “zero-rated” M-PESA transactions worth KSh1.76trn during the pandemic. Voice declined 6.5% year-on-year as the growth in customers and usage prompted by Covid-19 was offset by customers paying lower rates per minute. Total revenues declined by 4.1% to Ksh124.5bn, while interest before taxes, depreciation and amortisation fell 7.3% to Ksh63.4bn. While Covid-19 has accelerated the continent’s telecoms revolution by boosting customer registration and data usage, Safaricom’s performance indicates that some of the firm’s consistently bankable services are vulnerable amid the pandemic. Outgoing voice calls account for 33.9% of Safaricom service revenue while M-PESA accounts for 30.3%. The results cap a challenging first few months for Safaricom chief executive Peter Ndegwa, who assumed the role in April shortly after the death of former long-time CEO Bob Collymore.