Safaricom has registered a six per cent drop in its half-year profit to Sh33.07 billion as compared to last year.
The telco giants said attributed the profit drop with the decline in M-Pesa revenue due to free transactions that is aimed at supporting customers during the tough economic times brought by the Covid-19 pandemic.
The company also reported a drop in voice and messaging revenue as users are forced to cut budget during the Covid-19 period.
M-Pesa revenue dropped by 14.5 per cent to Sh35.89 billion despite the value of transactions rising by 32.9 per cent to Sh9.47 trillion.
In the results covering April to September, M-Pesa revenue dropped by Sh6.08 billion while voice and messaging revenues by Sh2.79 billion and Sh0.53 billion respectively.
Chief Executive Peter Ndegwa described the performance as good given the tough operating conditions brought by the Covid-19 pandemic.
“It has been a good half year and we are seeing improvement in the second half. However, we know Covid-19 disruption is not over given the resurgence in infections,” he said on Monday, November 9.
The drop was on account of the decision to zero-rate fees on transactions of Sh1,000 and below to reduce cash handling during the pandemic.
However, the telco benefitted from the increased number of people who were working from home to lower risk of contracting the infectious virus.
Ndegwa said mobile data achieved good performance and still has an opportunity to accelerate further.
Mobile data revenue grew by 14.1 per cent to Sh22.23 billion while home fibre revenues rose by 47.2 per cent to Sh1.64 billion.