ANALYSIS OF MOBILE BANKING SERVICE ON FINANCIAL PERFORMANCE OF TELECOMMUNICATION INDUSTRY A CASE STUDY OF SAFARICOM

Abstract

Over past years, telecommunication sector has had rapid growth due to globalization and advancement of mobile technologies. Due to various challenges: stiff competition, poor infrastructure, inflation and others, telecommunication companies have been realizing increase in revenue at declining rate even after introducing mobile banking service as per Safaricom annual report between 2018 to 2022. Financial inclusion was adopted in the telecommunication sector as a strategy to increase more service that earn more revenue due to stiff competition on voice service, internet service and short message service, though its operational efficiency has not been fully achieved by all companies. Hence, study investigated how mobile banking has affected financial performance of Safaricom Limited. The research was based on three objectives: To analyse link between mobile business payments, mobile loan and mobile saving on financial performance of Safaricom limited in Kenya. The research was founded by Permanent Income Hypothesis, Financial Intermediation Theory of Banking, and Technology Acceptance Theory. Quantitative methods were adopted in the study and nature of design was descriptive. Researcher applied census survey and target population was 126 respondents from department of finance and accounting. Researcher collected primary data from the respondent by distributing questionnaires. Research instruments tests were done where Content validity test was 0.83 and Cronbach coefficient of 0.938. The researcher used descriptive statistic and inferential statistics to analysed data collected. Hypotheses was tested by finding correlation in the study at significance of 0.05. The researcher presented findings in table and figures. Findings in objective one showed a strong positive correlation exists between mobile payment and financial performance (r=0.553, p=0.000). Research objective two demonstrates existence of strong positive correlation between mobile loans and Safaricom’s financial performance (r=0.791, p=0.000). Research objective three explained existence of strong positive relationship between mobile savings and financial performance, as per researcher analysis (r=0.655, p=0.000). Researcher concluded that mobile banking service should be implemented across all telecommunication companies since it directly affects financial performance.