CEO, Safaricom
Safaricom CEO, Peter Ndegwa, speaks on the MPesa app, Ethiopia expansion & new partnerships
Three months since launching the m-pesa app how is this doing and why is this of interest to us is because emphasis is a sizable ...
About Peter Ndegwa
Peter Ndegwa, CEO of Safaricom, has discussed the company's financial performance and strategic priorities in recent months. He announced that Safaricom Kenya achieved a service revenue of approximately 400 billion Kenyan shillings (about $3 billion) for the financial year 2026, representing 10% year-on-year growth, with net income growing 24.7% to 119 billion Kenyan shillings. Ndegwa stated that the company declared a record dividend of two shillings per share, totaling 80 billion Kenyan shillings, a 66.7% increase year-on-year. He also noted that Safaricom secured a 25-year license renewal, which he described as a major milestone bringing long-term stability and investment confidence to the industry. Regarding Safaricom's Ethiopia operations, Ndegwa said the company now has nearly 14 million customers and has covered about 60% of the population with 4G-plus coverage. He stated that losses in Ethiopia are reducing significantly and that the company is committed to reaching break-even by financial year 2027. Ndegwa attributed the improvement to regulatory reforms, including a market-led currency regime and new infrastructure-sharing guidelines from the Ethiopian Communications Authority. He also identified market disruption and reputation and trust as two key concerns, noting that smaller, more agile competitors have emerged in the fibre business and that the company's right to operate depends on maintaining customer trust.
Transcript (16 segments)
✨ AI-enhanced transcript with speaker attribution
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Interviewer0:03
Three months since launching the M-Pesa app, how is this doing? And why is this of interest to us is because M-Pesa is a sizable share of your revenue pie. And secondly, this is the edge of the super app, and we're seeing a lot of, for example, Vodacom partnering with Alipay. What are some of the opportunities you intend to unlock through this?
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Peter Ndegwa0:24
The super app is a really exciting opportunity. As we announced three months ago, we made huge progress. At the moment, we are almost at the four million mark. We've had 3.8 million downloads of the M-Pesa app, and even the regular usage is already very high for a product that is only three months old. There's a lot of additional products that we've added to the app. There are many programs, so companies that want to sell stuff can come onto the app. We'll have the Kenya Airways mini app, the SGL mini app. If you want to shop, you can go into the super app. So this will be the place to go, the destination, bringing together all these mini apps and allowing consumers to live their lives. The second thing, of course, is that we are improving the user experience. So you can use it in offline mode, even when there is no network. We can use it to print statements. It will be very clear how much money. In fact, customers are starting to complain that they have spent too much of their money, but we think giving the visibility to customers is great. And at the end of the day, the future is digital, and we are very delighted that we are making huge progress and that this is very popular with customers.
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Interviewer1:48
Any partnerships with the banks, especially in light of the open banking pursuit with the Central Bank? For instance, a bank lending directly to one via the M-Pesa platform as opposed to what is existing right now?
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Peter Ndegwa1:59
Already we have the M-Pesa mini app, actually the M-Pesa app having many apps there like I&M and KCB, which are already existing. To the extent that we partner with other banks in the future, we will be able to announce at that stage. Of course, that, as you know, will be subject to regulatory approval by the Central Bank of Kenya.
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Interviewer2:22
Since CBK expanded transactions to 150,000 and daily limit to 300,000, what is the volume of these high-value transactions?
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Peter Ndegwa2:33
We still see that most of the transfers are still at the lower end of the transaction range. The people who are able to use the higher end of the transaction range will be the SMEs, small and medium-sized businesses, the MSMEs who are doing business. They have more high-value customers, but most of the population will transact at the lower end. And that's one of the reasons why we reduced the transaction price when we went back to charging in January. For amounts below a thousand, in volume terms, the amounts below a thousand are still about 80%, although the value of course is much higher on the other end. So because M-Pesa is a ubiquitous mechanism for transfer, of course when you look at the app, given most of the people who use the app have smartphones, they're more likely to be higher-value customers. So there will be quite a lot of transfers. And remember, up till now, the wallet to bank and bank to wallet is still free. So there is a lot of people transferring money from bank to wallet and the other way down.
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Interviewer3:40
In the last conversation we had, you did indicate that pending the approval for the Ethiopia expansion, you would be giving us a revised earnings guidance. Do you have any indication as to how this is leaning at this point, because at least now we're a bit advanced in this?
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Peter Ndegwa3:56
Yes, our intention was always to give this guidance around the announcement of the H1 results. So we have been making a lot of progress. The current process is about putting the team together, we pay the license fee, we are currently recruiting all the suppliers, and we are in the operational phase because we launch sometime mid next year. But in terms of all the numbers, because there's quite a lot of numbers to update, we will be updating both the investor community but also the media and the public at the time when we announce the H1 results.
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Interviewer4:31
And still in Ethiopia, the political risk environment is a matter of grave concern to many people, over and above the fact that of course the capital outlay when you're venturing into that market is quite heavy. On the political side, are you bothered by what you're seeing in Ethiopia, the sanctions, etc.?
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Peter Ndegwa4:46
The political side, this issue was there even before we actually submitted the bid. Our view as a consortium is that we are in Ethiopia for the long term, to support the Ethiopian people and the Ethiopian government. And by digitizing the country, it will actually help improve people's lives. So of course we are monitoring the issue in the north. It's up to the Ethiopian government to comment on that; we don't want to comment. But because we are there for the long term, we will work in the country to ensure that we make the Ethiopians' lives easier.
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Interviewer5:25
Your partnership with the Nairobi Securities Exchange, what value of Bonga points thus far have been converted for purchase of shares?
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Peter Ndegwa5:32
Yes, we are very excited to have signed the deal in August this year with the Nairobi Stock Exchange, where customers, and even believe this, there's about four billion Kenya shillings worth of Bonga points that are still sitting with customers. So we are encouraging customers to use some of these Bonga points to invest and save through the stock exchange. They can get one shilling for every five Bonga points that they have. So far, we've seen about 600,000 worth of shares being purchased as a result of that, but we believe that with more awareness, there will be significant increase into the future.
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Interviewer6:12
On Kenya Power matters and smart meters, the utility company has expressed concern that you might apply for a distribution license and take over their business. Is it something that has crossed your mind as a possible area of diversification?
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Peter Ndegwa6:27
We would not want to comment on some of the transactions that we are doing with specific customers until they become part of the public domain. However, we do have technology. Internet of Things is a technology we believe that can help utility companies, of which Kenya Power is one of them, and also water companies, be able to reduce the level of losses by creating transparency in their distribution chain, in terms of how power is transmitted from generation to distribution to actually metering and eventually being paid by the customer. We are very willing to partner with Kenya Power at an appropriate time, to the extent that we can, to be able to support them in this process. It would benefit the country, we believe. But at this stage, we are not at contracting stage, so I can't comment on that.
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Interviewer7:22
I am aware that this week Safaricom, maybe even earlier, has begun switching routers for the home fiber business into the 5G network. How is the progress in terms of rollout of 5G? What is the sort of uptick you're seeing?
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Peter Ndegwa7:37
5G, as we announced at the time when we announced our full year results this year, is a trial phase, a test phase. We intend that we would have about 150 to 200 sites carrying 5G. The first use case will be at home, especially in areas where we don't have fiber. And we believe that we'll be able to channel most of the testing in that area, and it will benefit customers in terms of speeds and reliability going forward. And for next year, we can be able to commercialize a bit faster, but we'll be able to announce that at an appropriate time.