Kenyan mobile money deposits reach $8 billion

Mergers, Acquisitions and Financial Results

A Kenyan sends money through his mobile phone. The sector has witnessed a phenomenal rise, industry regulator data shows.   Kenyans deposited $8 billion into mobile money services for the year ending June 2012-- a 38 per cent rise that revealed why the country's government has set its sights on the thriving sector for further taxation to meet its obligations.

According to data released by regulator Communications Commission of Kenya (CCK) Tuesday, this was up on the $5.8 billion deposited in the year that ended June 2011.

M-Pesa, a service run by market leader Safaricom and renowned globally, accounted for the bulk of the increased deposits in what CCK said showed an unmet appetite for financial services in the east African country.

The number of mobile money agents rose 16 per cent to 49,079 while the number of mobile money subscriptions rose by 12.13 per cent to reach 19.5 million.

"This upward trend signifies that mobile money transfer service has become instrumental in providing the unmet demand for financial services, thereby promoting financial inclusion in the country,” CCK said.

It is this vast flow of funds that Kenyan Finance minister Njeru Githae has targeted, with new taxation measures passed by the country's parliament last week.

The new measures would see the government attach a 10 per cent excise tax on all mobile money transfer fees charged by cellular companies and other financial institutions.

Mobile phone subscriptions in the period under review rose 17.5 per cent to 29.43 million, meaning penetration in the country is now at 75.4 per cent.

Safaricom maintained the lead in the industry, with a 64 per cent subscription market share, a four percentage point drop from last year.

Telkom Orange lost 0.3 percentage points in market share while the other two operators, Airtel and YuMobile, both gained market share.

"We attribute this strong growth to increased investments in our people, product innovation and improvement in quality of service has been the key driver in making us the network of choice by more customers in Kenya during the last quarter," a statement from Airtel said.

Despite the increase in the number of mobile subscriptions, Kenyans are talking less. The minutes of use per subscriber per month fell by 20.3 per cent from the similar period of last year.

Meanwhile, the year was tough for companies in the fixed data market as revenues fell drastically. CCK claims that revenue in the data market, excluding the mobile sector, fell 88.7 per cent in 2011.