Share price is trading above ksh.30.
Some good news in the offing like successful bid to enter Ethiopia.

Safaricom in 2020
n a recent interview with Safaricom’s interim CEO Michael Joseph, Global Investment Bank and Financial Services Citi revealed that the telco expects to have countrywide 4G coverage by July 2020 and a number of exciting new products around Mpesa in the coming year.

In a note sent to investors, Citi says M-Pesa penetration is full, however, there is room to drive active users and number of transactions from the average of 13 transactions a month to at least one transaction daily. The telco’s management expects faster growth of “new business” as the number of use cases continues to grow. Michael Joseph also reiterated that a number of new products are in the pipeline to be launched in early 2020. Some are targeted to improve saving culture, others to improve access to products used on a daily basis.
According to Michael Joseph, the cost of credit is still high and the success of new products is difficult to predict. However, he says Fuliza take up exceeded expectations. Safaricom is considering Pay-As-You-Go model to drive device and usage take up.

Telecom operations

The CEO also says the recent simplification of the tariffs with no expiry has been positively perceived by customers and it will be difficult for competitors to match. The move is part of overall program to improve the telco’s operations and will be done in three phases which involve Simplification of the brand and its products, 4G everywhere new M-Pesa products.

Ethiopian Market:
In addition to the privatization of monopoly state-owned Ethio Telecom, the Ethiopian government is considering sale of two licenses.

Mr Joseph expects that good political relations between Kenya and Ethiopia would play a big role in the licensing discussion. Safaricom is considering making a bid as part of a consortium of four partners, including Vodacom and two financial ones. New license is being considered.

According to Michael, the size of Safaricom stake will depend on overall cost, which the company plans to fund via debt. The telco is currently debt-free.

Incase the Safaricom consortium fails to acquire licencing, the telco sees an opportunity to partner with Ethio Telecom particularly on the provision of Mobile Financial Services.

New CEO, Peter Ndegwa:

According to Mr Joseph, the Mr Peter Ndegwa fits the bill as Safaricom CEO, except for telecom specific criteria. Mr M.Joseph intends to support the new CEO through transition and possibly for longer.

Valuation and Share Price

Citi has therefore placed a Ksh 30.1 price target based on the telco’s superior growth and synergies between the digital platform and telecom business.
However, Citi sees some risks that could prevent Safaricom’s share price from reaching the Ksh 30.1 target price or even outperform.
Some of these risks include financial regulation as well as the entry of international payment platforms, which could use pricing as a way to gain market share.


https://kenyanwallstreet...pesa-ethiopia-expansion/

Safaricom plc beats Zuku's wananchi on broadband connections for the first time.
As at end of September 2019
Wananchi 151,548
Safaricom 154,603

Skin in the game?

Michael Joseph: Why I sold all my Safaricom shares
Friday, January 17, 2020 11:13


Safaricom’s founding chief executive, Michael Joseph, has revealed that he sold off his entire shareholding in the company to fund the construction of his retirement home.

Earlier regulatory filings showed that Mr Joseph — who currently serves at the interim CEO of Safaricom following the death of Bob Collymore last year — sold his entire stock in the giant telecommunications firm in the course of its fiscal year to March 2019.

Disclosures in the company’s annual report showed that Mr Joseph owned 1.17 million shares in the telco as at March 31, 2018, but had sold all of them by the end of the financial year.

The move raised speculation over Mr Joseph’s future ties with Safaricom — a company he has been credited for moulding from a department of a former State corporation into East Africa’s most profitable company, impacting on the lives of millions of people through telecommunication and money transfer services.

Mr Joseph, however, told the Business Daily that he offloaded his shares to fund the construction of his retirement home.


“When you invest in a company like I did with Safaricom you invest for a reason,” Mr Joseph said. “You invest at some point because you want to invest. When you take the money out you want to spend on something. In my semi-retirement I am building a house and I needed the funds”.

He did not immediately reveal where he is building the home.

Mr Joseph already owns a home in the Lewa Wildlife Conservancy in northern Kenya. Formed in 1995, the Lewa conservancy is a wildlife sanctuary covering over 62,000 acres that is home to a wide variety of wildlife, including the rare and endangered black rhinos.

STAYING ON

Mr Joseph secured Kenyan citizenship in 2014, joining a long list of expatriates and diplomats who opt to live in Nairobi after their tour of duty. He took advantage of the 2010 Constitution that allowed Kenyans to hold dual citizenship, which means he does not have to denounce his US nationality.

Going by the prevailing Safaricom share price of Sh27 around the time he offloaded his shares, Mr Joseph’s shareholding was worth well over Sh31 million. Safaricom’s share price closed at Sh32 on Thursday.

“If I could keep (my shares) there, I could keep them there. I could keep them for sure. It has nothing to do with Safaricom,” he said on the decision to sell off his entire stake.

He has led Safaricom in an interim capacity since last July’s death of his successor, Bob Collymore. Safaricom last October appointed former East African Breweries Limited (EABL)

finance director Peter Ndegwa as its new CEO. Mr Ndegwa, a Starehe Boys Centre alumnus, will take over from Mr Joseph on April 1.

Mr Joseph, who is also the chairman of national carrier, Kenya Airways

, said he would remain on the Safaricom board after stepping down from the interim role.

“My term is not up,” he said.

The government, which owns 35 percent of Safaricom, had expressed its preference for a Kenyan to take over from the late Collymore, breaking the trend where Vodafone had always appointed the CEO and chief financial officer at the telecom operator.

Vodafone had a 40 percent stake in the firm before ceding a 35 percent stake to South Africa’s Vodacom.

Mr Joseph, 73, joined the Safaricom board on September 8, 2008 and was employed by Vodafone Group Services Limited as the Director of Mobile Money. He currently serves as Vodafone’s Strategic Advisor to the Boards of Vodacom Group South Africa, Vodacom Tanzania, Vodacom Mozambique and Safaricom Limited in Kenya.

He was the CEO of Safaricom Limited from July 2000 when the company was relaunched as a joint-venture between Vodafone UK and Telkom Kenya until his retirement in November 2010. During his tenure, he steered the company from a subscriber base of less than 20,000 to over 16.71 million subscribers.

Safaricom’s net profit for the six months through September this year jumped 14.4 percent to Sh35.65 billion on strong M-Pesa and mobile data revenue growth that offset a decline in voice and messaging (SMS) revenues. This has set the telco on course for the eighth straight year of increasing its bottom-line.

Mr Joseph took over at KQ in 2016 from Toyota Kenya chairman Dennis Awori. He has been in the forefront in overseeing the implementation of a turnaround strategy to rescue the struggling carrier, which reported a Sh7.55 billion net loss as December 2018.

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