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Safaricom maintains growth path

NAIROBI, Kenya, Nov 4- Despite operating in the challenging economic environment, Telecoms firm Safaricom has posted a 6.7 percent increase in profit after tax to Sh6.6 billion for the six months ending September 2009.

The company’s Chief Financial Officer Chris Tiffin credited the results to the roll out of innovative products and increased infrastructure investments which during the period stood at Sh8.5 billion.

“Our profit before tax grew by 1.7 percent to Sh9.13 billion. We recorded double digit growth in revenue to Sh40.7 billion although voice revenues only increased by 6.2 percent (to Sh31.6 billion) because of the reduction in tariffs,” he explained.

Data revenues went up by 93.6 percent to Sh7.2 billion which the official explained was driven by the growth of broadband mobile services and the money transfer service, M-Pesa which in September alone saw Sh22.5 billion transferred.

Although the company’s market share had declined marginally to 77 percent, its control of the revenues in the market increased to 83 percent. Their customers grew by 1.25 million during the period bringing their subscriber base to 14.5 million.

While releasing the company’s half year results to investors, Chief Executive Officer Michael Joseph said they were now positioning themselves to be a big data operator and expect the segment to contribute about 25 percent of their revenues in the three years.

“If you just took 25 percent of the revenue and said it’s on pure internet access, we would have to own another cable,” he said in reference to The East African Marine System (TEAMS) cable in which they own 19.5 percent capacity.

Major initiatives such as the extension of their 3G network and acquisition of data service companies have been undertaken to help them achieve this goals.

He disclosed that they were in the process of finalising the purchase agreement for the acquisition of a WiMAX service provider Packet Stream Data Network, which upon completion will allow Safaricom to roll out a national fixed data service.

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Mr Joseph forecasted that there will be a data revolution in the country once the prices of laptops come down to about Sh15,000 a piece.

Also present at the function was Information Minister Samuel Poghisio who assured Safaricom that the government would ensure a fair regulatory regime for all the telecommunication industry players to operate in.

“We are going to be facilitating not hindering growth we are going to implement relevant policies so don’t be concerned with that,” the Minister told Safaricom’s top officials.

There has been a war of words between Safaricom and other players over reports that the Communication Commission of Kenya was being prevailed upon to implement policies such as the Dominant Player Framework, laws that would favour the other players over Safaricom which is the bigger player in the market.

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