Safaricom eyes high revenues from SMSes

By Semaj Itosno, Nairobi, Kenya

Safaricom has started a campaign to boost its share of SMS revenues.

Kenya's leading telecoms operator on Tuesday launched a two-month promotion worth Sh85 million, in which 60,961 subscribers will win prizes including the top award of Sh10 million for one lucky subscriber and a reward of Sh2 million to four customers.

The promotion comes as data from the Communication Commission of Kenya indicated text message traffic dropped 3.6% to 986 million in the three months to June.

Safaricom’s chief executive officer, Bob Collymore, termed the promotion a reward scheme for its loyal subscribers, but analysts reckon the campaign is geared at increasing SMS traffic.

Under the promotion, subscribers will send an SMS to Safaricom that will cost Sh5 a text, which is higher than the normal charge of a shilling.

In the year to March, the SMS business contributed Sh7.8 billion, which is equivalent to three per cent of Safaricom’s revenues of Sh107 billion. It has a target to grow this business to Sh8.8 billion in the year to next March.

The voice business accounted for Sh68 billion, while M-Pesa  brought in Sh16.9 billion with the data and handset businesses grossed Sh6.5 billion and Sh6.8 billion respectively.

The narrowing of call charges within the network to an average of Sh3 and the adoption of the use of Voice over Internet Protocol (VoiP) technologies such as Skype and Google talk which are cheaper has contributed to the drop of SMS usage especially at the international level.

“During the quarter, a total of 986 million Short Messaging Service (SMS) were sent compared to 1.0 billion SMS sent the previous quarter,” says CCK latest report. 

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