The day Mpesa overtakes voice as the main contributor to revenue is not far away...with the global expansion the Mpesa story is not finished and it can only go parabolic..Safcom has re engineered itself far away from voice into a total telco giant..best company in Africa...yes in 10 years time.

@mwanahisa remember safaricom increased its CAPex by 46.1% to [25.48b]and more investment is going to go to this sector as well as strengthening its 2G network.short term Borrowing went down by a whooping 66.8% although long term borrowing went up by 59.1%

Casting my safaricom die hard coat aside I think there is a cause for worry in these areas.

1.Mpesa growth is too negligible for such a taunted solution.Either safaricom is facing stiff competition from other operators or vodafone is eating most of the juice.

3.Data its ARPU went down significantly from Ksh 126 to Ksh.101 maybe this might have been caused by the price war btwn them and orange but still thats really worrying.For a company that wants to move from over reliance on voice this is telling .Lets hope safaricom business and its collaboration with KBA will create the necessary revenues to hedge against reduced voice ARPU.

4.Voice dropping from Ksh.356 to Ksh.300 is also a cause to worry although it was never unexpected given last years price war and the reduce cost of calling.The management should be able to spur some activity in this segment to try and increase customer spending but as CCK reduces its interconnect fees its obvious Voice ARPU will continue dropping.

@selah, first I am glad to observe that you can actually cast aside your "Safcom diehard persona" aside.

I am hoping that the increase in Capex as noted by yourself above will lead to a greater stranglehold on the mkt by SCOM. This is especially through improvements in quality of voice calls, growth in data revenues/a bigger share of the data market, innovative new products etc.

1. Right, so that means is there is a mis-match between Revenue and associated Cash-flows, yes? As an analyst, how would you adjust for that... or is the effect "non-significant/immaterial"

2. As far as the liability/ unearned revenue for Bonga points, could this be used to "park" revenues and smooth results in later stages by changing the value of a bonga point? Indeed, is a claw-back of the same allowed under IFRIC? (I haven't time to go through it)

3. Safaricom is playing a major role in Kenya's shadow banking system w/some individuals using M-Pesa as a bank account. What are the chances the firm could enter the money-markets and earn interest on these funds?

ta

@Mwanahisa - you are seeing the forest for the trees....

I suspect some "window dressing" being done here so retain investor confidence and perhaps deny Airtel some gloating rights...its happened elsewhere before...

If I may throw in my two bits....its been the last 7 months that they have had to wage price wars....I cannot believe that even the increase in minutes from 60 to 96 can help revenue jump that much especially when:

1 - In seven of the 12 months the tariff war waged long and hard....and this might be very simplistic thinking (I will not claim to be a stocks or business analyst - rather just looking at a few vital signs...) in 7 months it had to halve its tariffs and that in itself was not really a USP as such as everyone else jumped onto the Airtel band wagon....ergo for voice revenue to decline by a mere 1.7%:
a) minutes used would have to be be nearly double (100-120 mins) or grow by at least 50% AND...
b) subscriber base would have to grow significantly as well in order to mitigate lower tariffs for voice revenue.

They report 75% market share but by end 2010 it was more like 72%. I am not privy to the fine print of this report but SCOM has always reported the number of SIMs sold rather than active subscribers....

They say "Revenues grew at a faster rate than subscriber growth as we continue to maintain market leadership" hmmm.

As stated above, I agree with @Mwanahisa - its the last 6 months...also worth observing SCOM reached its plateau in 2010 with 5.1% growth in profits....and now 12.4% decline in profits (despite supposedly higher subscriber numbers, expansion into enterprise data, increased consumer data and of course 13.8 million mpesa subscribers (thats like 60% of the adult population - really? ). As the market becomes more saturated, ARPU, even for data, will decline...enterprise data can only grow so much...(and there are more serious players in this sphere esp for the SMB segment).

I think maintaining the dividend 8 billion might help psychologically with shareholders...but not for long...