This week’s spotlight falls on Safaricom PLC, Kenya’s leading telecommunications and mobile money operator, which continues to dominate East Africa’s financial and digital landscape. Traded on the Nairobi Securities Exchange under the ticker SCOM, the company remains a bellwether for both regional investors and multinational funds with exposure to Africa.
Why Safaricom?
Safaricom is the operator of M-Pesa, the mobile money service used by more than 30 million Kenyans daily. The platform has grown into a critical part of the national economy, enabling transactions, remittances, and digital lending at scale. Recent expansion into Ethiopia, Africa’s second most populous country, has significantly raised the company’s growth potential. Early reports suggest adoption in Ethiopia is gaining momentum, despite regulatory hurdles and infrastructure challenges.
Financial performance
Safaricom’s latest results show steady revenue growth, with M-Pesa now accounting for more than 40% of total service revenue. Earnings before interest and tax remain resilient, reflecting both strong customer loyalty and expanding data usage across its networks. Investors are also buoyed by management’s confidence that Ethiopian operations will break even within a few years.
Catalysts ahead
Key drivers to watch include the continued rollout of Safaricom’s network in Ethiopia, partnerships with global fintech players, and regulatory developments in both Kenya and Ethiopia. With mobile penetration still rising across Africa, Safaricom is well positioned to capitalise on growing demand for digital connectivity and financial inclusion.
Risks
The main risks lie in political and regulatory uncertainty, currency fluctuations, and rising competition in mobile money from new entrants. Additionally, large infrastructure investments in Ethiopia could weigh on margins in the short term.
Valuation and outlook
At its current trading level on the Nairobi Securities Exchange, Safaricom is considered moderately priced relative to its growth prospects. Analysts see potential upside as Ethiopia scales and M-Pesa continues to innovate with lending, savings, and cross-border payments. For long-term investors, Safaricom offers a unique blend of stability and growth in a fast-developing region.
Safaricom PLC is traded on the Nairobi Securities Exchange (NSE) in Kenya under the ticker: SCOM.
Disclosure: This article is for informational purposes only and does not constitute investment advice. Readers should conduct their own research or consult a licensed financial adviser before making investment decisions.
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