In April, I wrote about ’The State of Mobile Money Revenues’ and a year ago, Phil Levin wrote about Mobile money making its mark with major groups: Millicom, MTN, Vodafone and Orange. Today I will look at the recent financial results released by Orange, Safaricom, Airtel, Millicom, Vodacom and MTN and compare these to previous announcements.
* Orange and MTN reported registered customers only. We used the global active average of 29.9% reported in the GSMA 2013 State of the Industry report to estimate their active customers.
Let’s start with who said what:
Orange Money:
The Orange Money mobile payment service continues to go from strength to strength. The service topped nine million customers in 13 countries in Africa and the Middle East. Orange Money processed more than 2 billion euros worth of transactions in 2013.[1]
In their prior year, Orange reported 5.6m customers in 13 countries – this signifies a healthy growth of 60.7%. For the first time they have provided financial information in the form of total value of transactions processed.
Safaricom Kenya:
Safaricom reported 21.6% growth in M-PESA revenue to Kshs 26.56 billion ($307.8 million), driven by:
- 15.4% increase in 30 day active users to 12.2 million
- 13.0% increase in registered customers to 19.3 million
- 34.0% of airtime top-ups being sold directly through M-PESA[2]
Whilst M-PESA revenues continue to contribute 18% of total revenues for Safaricom (no change from prior year), the company continues to impress with their overall growth (21.6%).
Six months ago, Gunnar Camner wrote about M-PESA half-year results for 2013-2014, highlighting the rise of B2C and C2B transactions in a classic “send money home” market. M-PESA’s 2014 figures demonstrate that this trend continues to grow and now accounts for an impressive 24.1% of total values, possibly giving their profit margins a boost, given they don’t have to pay agent commissions on these transactions.
Airtel Africa:
Airtel Money is gaining customer acceptance across Africa:
- The total customer base using the Airtel Money platform increased by 28.2% to 3.5 million as compared to 2.7 million on a sequential quarter basis.
- The total number of transactions during Q4 2013 rose by 25.5% to 92.0 million as compared to 73.3 million in the previous quarter.
- Total value of transactions conducted using this platform increased by 28.6% to $2,202 million in Q4 as compared to $1,713 million in Q3.[3]
In their previous annual report, all we were told was that Airtel Money was available in 18 of the 20 GSM markets. A year later they have shared significantly more information in terms of number of customers, transaction volumes and value, demonstrating decent growth in the process.
Millicom Group:
MFS revenue increased again strongly in Q1 2014 in local currency (+49% versus Q1 2013):
- In the first quarter of 2014, MFS comprised 8% of Millicom’s recurring revenue growth at $23m for Q1 2014 (compared to $16m for Q1 2013).
- MFS penetration grew by 56% in Q1 2014 versus Q1 2013, reaching 7.3 million customers and exceeding 18% of Millicom’s mobile customer base in the markets where the service has been launched.
- In Q1 Millicom added over 1 million new customers, as penetration growth remained very solid in Tanzania (54.5%), Rwanda (38.0%), Paraguay (30.9%) and El Salvador (16.0%). Both Honduras and Chad have now passed the 10% penetration mark.[4]
In their 2013 annual report, Millicom reported revenues for their MFS business totalling $79 million, up 98% over 2012.[5] Customer growth has been healthy and six markets have crossed the 10% penetration mark compared to three at the end of 2012.
Vodacom Group:
- Active M-Pesa customers increased 24.5% to 5.8 million, totalling 23.3% of Vodacom’s active GSM customer base.
- In Tanzania, their most developed M-Pesa market, M-Pesa revenue grew 59.0% to contribute 19.1% of service revenue.
- 25% of total Vodacom Tanzania airtime is now purchased using M-Pesa.[6]
Their Tanzanian deployment continues to enjoy success with solid growth in revenues from mobile money and airtime sales via M-PESA, however they have not had similar success in South Africa, where they are planning to re-launch the service in the next two months.[7]
MTN Group:
The number of registered MTN Mobile Money subscribers grew by 57.3% to 14.8 million.
- Cameroon: 1.4 million registered MTN Mobile Money subscribers
- Ivory Coast: 59.0% increase in registered subscribers to 1.5 million
- Uganda: 47.0% increase in registered subscribers to 5.2 million with more than 25 million transactions per month [8]
MTN’s presence in the region remains strong with 13 deployments across Africa, however as they have admitted, growth in the active subscriber base was slower than expected, due in part to regulatory and operational challenges.
So what does all this mean for the industry?
Based on a comparison of the numbers reported in 2012 and 2013, it is clear that deployments are over-coming some foundational challenges around customer activation and distribution. They have also started thinking about what to do next, and this is where some of the deployments are moving their focus to ecosystem transactions (bill payments, bulk payments, international remittances and merchant payments).
This year we’ve seen more information published than ever before, illustrating the increased strategic importance of mobile money as a business. Going forward the more successful the deployments are, the more confident they will be in sharing their results.
Notes:
[1] the little Orange book 2013 annual report (http://ar2013.orange.com/)
[2] Safaricom Limited FY14 Presentation (http://www.safaricom.co.ke/images/Downloads/Resources_Downloads/FY_2014_Results_Presentation.pdf)
[3] Quarterly report on the results for the fourth quarter and full year ended March 31, 2014 (http://www.airtel.in/wps/wcm/connect/e10e645b-d938-4299-9761-4239f8b543e5/Bharti-Airtel-Limited_Quarterly-Report_March-31-2014.pdf)
[4] Millicom Results Q1 2014 (http://www.millicom.com/media/493344/Millicom_Earnings_Release_24_April_2014.pdf)
[5] Millicom Annual Report 2013 (http://www.millicom.com/media/394451/Millicom_Annual_Report_2013_.pdf)
[6] Vodacom Group Limited quarterly update for the period ended 31 December 2013 (http://www.vodacom.mobi/cs/groups/public/documents/document/quarterly_update_31_dec_2013.pdf)
[7] Vodacom to relaunch M-Pesa in South Africa (http://www.telecompaper.com/news/vodacom-to-relaunch-m-pesa-in-south-africa–1015197)
[8] MTN Group Limited Financial results (https://www.mtn.com/Investors/Financials/Documents/Annual_results_booklet_2013.pdf)