Safaricom may see “dip” in revenue: CEO

Kenya’s biggest mobile-network operator, Safaricom Ltd., has declared that it is not going to lose market leadership and will readily keep margins while competitors lower call charges.

The stock grew as much as 4.1% before dealing 2% higher in Nairobi.

According to Chief Executive Officer Michael Joseph, the biggest company by market value in Kenya, Safaricom may report a “dip” in revenue but profit will be little changed in the fiscal year to March 2011 after Bharti Airtel’s  Zain Kenya unit, Essar Telecom Kenya Ltd. and Telkom Kenya Ltd. lowered prices in August. Margins are blessed and rivals’ call rates are not sustainable.

Safaricom saw a profit of US$190 million in the year through March, and the median estimate of 10 analysts surveyed by Bloomberg is for net income in fiscal 2011 to rise 21%

According to Aly-Khan Satchu, an independent analyst based in Nairobi, the media blitz by Zain had scared everybody. The company is at the tail end of the overreaction by investors and it is rebounding from here.