Higher taxes could hit demand warns part UK owned Safaricom

Safaricom Chief Executive, Bob Collymore
Safaricom Chief Executive, Bob Collymore

Kenyan mobile phone operator Safaricom Plc, part owned by Britain’s Vodafone and South Africa’s Vodacom, has warned that steep increases in taxes on mobile telephone and mobile internet access services could slow its momentum in the second half.

On Friday, the company said that driven by fast growth in its mobile financial services business M-Pesa and mobile data, as well as fixed internet access to homes and offices, its core revenue for the first half to the end of September rose 7.7 percent to Ksh 118.21 billion.

Although M-Pesa’s growth beat their analysts’ forecasts, the outlook for Kenya’s biggest mobile operator was hit by taxes on its main services, which rose by 50 percent in September which forced Safaricom and other operators to increase prices.

Safaricom Chief Executive Bob Collymore said he believed the taxes were adding pressure on customers and said the company has opened talks with the government to discuss the tax increases.

M-Pesa’s revenue rose 18.2 percent to Ksh 35.52 billion while revenue from mobile data services and fixed internet services increased by double digits.

Its shares jumped 4.26 percent after the results were announced to trade at Ksh 24.50 shillings each.

Leave a Reply