* Enforced price cuts hit first-half earnings
* Aims to increase smartphone usage and 4G coverage
* Holds 51% stake in consortium bidding for Ethiopia licence
By Duncan Miriri
NAIROBI, Dec 9 (Reuters) - Kenya's biggest telecoms
operator, Safaricom, expects to be able to end
coronavirus-related price cuts at its M-Pesa business at the end
of the year, its CEO said on Tuesday.
M-Pesa, which is used to send money, save, borrow and make
payments for goods and services, is one of the most popular
modes of payment in Kenya. At the end September it had nearly 27
million active users in a population of 47 million.
Safaricom, part-owned by South Africa's Vodacom and
Britain's Vodafone, removed all charges on small
peer-to-peer transfers in March to facilitate cashless payments
during the COVID-19 pandemic.
The move was ordered by the central bank, which also
directed commercial banks to remove charges on customers' cash
transfers to mobile wallets until the end of the year.
"We have not seen anything that says it should be longer,"
Safaricom CEO Peter Ndegwa told Reuters.
Safaricom's core first-half earnings dropped 10.5% year on
year, hit by a 14.5% decline in M-Pesa revenue.
Talks with the central bank are ongoing, Ndegwa said, adding
that the company may yet cut prices for some M-Pesa services
after volumes rose significantly during the pandemic.
Safaricom has also been focusing on its data business to
offset the M-Pesa revenue drop, offering 60,000 customers
financing to buy 4G phones in an effort to boost usage.
"More than half of our handsets in the market are 2G,"
Ndegwa said. "Our intention is to migrate a lot of those 2G
handset holders into 4G-enabled handsets."
The company aims to increase the proportion of smartphones
on its network to 70% over time, from current penetration of
less than 20%.
It is also expanding its 4G network to cover all of the
country by the end of this year, from 90% coverage last month.
Safaricom, which is bidding in a consortium with Vodafone
and Vodacom for one of two mobile phone operator licences on
offer in Ethiopia, will hold 51% of the new operator if its bid
is successful, Ndegwa said.
(Editing by David Goodman)