Last updated 2 months ago | By Frankline Sunday
Mobile service provider Safaricom lost Sh1.9 billion in revenues after the government banned sports betting last year.
This comes even as the company made Sh84 billion from M-Pesa in the 2019/2020 financial year. This is against another Sh600 million revenue loss due to waiver of sending charges on transaction amounts of less than Sh1,000.
“Service revenue increased by 4.8 per cent, driven by sustained customer acquisition and recovery of mobile data growth, which is now back to double digit, along with sustained M-Pesa and fixed data growth,” said outgoing CEO Michael Joseph. “The growth was partially offset by contraction of the betting industry and the free transaction fees associated with our Covid-19 response.”
Last year betting companies BetIn and SportPesa closed shop locally following protracted battles with the Kenya Revenue Authority.
In August, Interior Cabinet Secretary Fred Matiang’i said sports betting firms owed the taxman more than Sh26 billion in backdated taxes. Dr Matiang’i also threatened to immediately deport any foreigners engaged in the business under a false visa.
The Safaricom’s financial report also indicates that the waiver of transactions fees on amounts less than Sh1,000 saw a Sh600 million revenue loss. The company is, however, confident the revenue loss will even out in the long term.
The firm is now working on a unit trust investment product that is expected to be the newest service on the M-Pesa application following the launch of Fuliza last year.
“We are in the final stages of piloting a unit trust investment product that will enable customers to create and attain wealth,” said Michael Joseph. “The Market Place App in development will aid in enhancing M-Pesa as a lifestyle platform.”
At the same time, the company says the reorganisation that brought the M-Pesa brand under full control of Safaricom and Vodacom resulted in a Sh3.3 billion one-off gain that contributed to its Sh73.6 billion revenue haul.
Safaricom has proposed paying Sh56 billions in dividends translating to Sh1.40 per share.