Last week telecom company MTN released its 2022 results.
Revenues, profit were up and for investors in the company they
will be paying out their final dividend for the year, which will have seen
shareholders pocket a total of sh15.9 per share for 2022.
Everybody has their favourite numbers, I am always interested
to see how the data and fintech subscribers and revenues are moving, especially
against voice numbers.
First of all in 2021, it was the first time, that revenues
from voice – what we pay to call, fell below half the companies total revenues.
While these grew by 3.6 percent, data and mobile money revenues grew in double
digits upsetting the status quo.
"In 2022 data and fintech revenues continue to gallop ahead while voice revenues slipped 0.5 percent, the first time in the company’s history that voice revenues did not grow...
The writing is on the wall voice is out and data and fintech
are in.
It reminds me of former Safaricom CEO Bobby Collymore’s
prediction when he took over the reins at the Kenyan telecom firm, that one day
voice will be an add on, given away for free, that the action will be in data
and fintech services. I could not relate at the time but it is coming to pass every
day.
When Airtel lists its shares – they were supposed to do so
by July last year, we will be able to tell whether this is an industrywide trend
or restricted to MTN. I bet it shows across the industry.
This is an important, even critical, to the development for
the economy.
Beyond the ever-increasing access to information that come with
improved and more widespread data services is the fact that credible business
transactions can be done quickly and safely using data.
The spoken word has its limitations. Information transmitted
via this medium – unless recorded, can be dismissed or refuted in the future.
The written word is more easily verifiable, hence the need for written
contracts.
While its possible that most of our data is consumed by
entertainment, it just as likely that its use in business is expanding.
"The efficiencies to the whole economy will creep up on us, because it is easy to take these new services for granted, but let us look back to an earlier time.
There was a time when there when we did not have mobile
phones ( for those born after 2000, just believe it) and the country was good
for about 50,000 landlines, many of which were down anyway.
So things we take for granted now like making and confirming
appointments, deliveries, calling a cab these were all none existent
activities. How did we go about these things? We did not. Booking appointments was
done in person or by mail (if you had a post office box), deliveries? How! And you
walked to where the special hires (do you remember those guys) to get a ride.
The explosion in boda-bodas has been largely facilitated by the mobile phone.
There were no bodas, expect maybe at the border.
Efficiency is the ability to do more work per unit of input.
The input may be time or money or effort. So we are now doing more work than we
used to because we can communicate better.
Taken to the next logical conclusion is the rise of mobile
money or fintech as a sector. The efficiencies here are obvious ( at least to
me). To give my friend or relatives money I had to meet them in person, send
someone with their money or they send someone to pick the money Now for the
cost of less than a return taxi fare I can move money around at the speed of
light and the other minutes, which would have been spent going to and fro can
be used for something else.
Some stoneagers would rather stand in line at the bank to
pay their bills than pay the transaction fees charged when they pay online.
They cannot be helped.
And these our most basic transactions in a day scale it up
now to companies, schools and traders and the numbers begin to bogle.
In June last year it was reported that the total number of
mobile money transaction stood at sh145trillion in the first six month so last
year. To put this in perspective the national budget was about sh48trillion for
the whole of 2021/22.
"By definition when money moves it moves to where is needed from where it less needed, broadly speaking. These trillions of monies a large part of it, was probably doing nothing under our mattress, in our socks and bras. It has taken mobile money companies to liberate them from those dark, smelly corners into the light of day...
MTN reported that last year fintech users grew about ten
percent to 11 million users. Assuming they show the same rate of growth (my feeling
is it will actually accelerate) we will be doubling mobile money users ever seven
years. What seemed like a pipe dream a few years ago, becoming a cashless
society, is happening before our very
own eyes.
The more of us who are signed on to mobile money and other
fintech applications the faster transactions will be done in the economy. And
if time is money it follows that the economy will be the better for it.
It probably explains why you can turn up at a bar on a Monday
night in Kampala and it seems like the weekend – money is flowing more efficiently
boosting consumption and inevitably production.
