Safaricom Subscriber Base Jumps 50% in Six Months

Kenyan mobile operator, Safaricom has reported that it subscriber base rose over the six months to October by 50.3% over prior year position of 7.956 million to 11.956 million - while turnover increased by 20% compared to September 2007 to Kshs 34.5 billion (US$469 million).

EBITDA increased to Kshs 15 billion (US$204 million), a growth of 15.5% over prior year. Including one off items, Profit After Tax reduced to Kshs 6.217 billion (US$84.5 million), a decrease of 14.7% over the previous yearÃ's profit of Kshs 7.289 billion (US$99 million).

As of 30 September 2008, the company had 11.956 million subscribers consisting of 11.824 million prepaid and 132.3 thousand post-paid subscribers. This compared to 7.956 million subscribers, as of 30 September 2007 consisting of 7.853 million prepaid and 103.4 thousand post-paid subscribers, representing an overall growth of 50.3%.

A caveat is that in the prospectus put out when the Kenyan government floated 25% of the company on the local stock market, it was noted that Safaricom does not remove its inactive subscribers from its calculation - so the actual number of active customers is not known.

In the period overall churn increased to 25.1%, compared to 23.5% in the previous period. Prepaid and post-paid churn moved to 25.4% and 0.1%, respectively, compared to 23.7% and 4.3%, respectively, in the previous period. The increase in prepay churn was largely put down to connections made in the time leading up to the elections which were subsequently disconnected and also due to the effect of inflation and reduced spending power during the period.

The company said that its market share over the same period increased from 74% to 81%.

In April Safaricom launched the first and only 3G network in Kenya. The network has now been expanded to cover Nairobi, Mombasa and Magadi. To complement this service a 51% stake in One Communication, a WiMAX company, was completed during the first half.

The company warned that a more competitive industry landscape is expected to place downward pressure on SafaricomÃ's market share of gross additions in the medium term, but it still sees strong growth in the industry as a whole. Mobile penetration, which is currently around 39%, is expected to increase over the next 4 years to a level of around 60%.

The Kenyan government owns 35% of Safaricom, 25% has been floated on the stock exchange and 40% is held by Vodafone Kenya Ltd - which in turn is 87.5% owned by Vodafone Group and 12.5% owned by a mystery company, Mobitelea.

Posted to the site on 12th November 2008