Safaricom Chief executive Peter Ndegwa has signaled the separation of MPESA from the main business, to run as a separate entity.
“In terms of whether we intend to spin off M-Pesa as a separate business, from a structural perspective, that is something we will continue to review as Safaricom evolves so that we have an optimal corporate structure,” Mr Ndegwa told Business Daily .
The move is intended for entrenching Safaricom as a financial service provider.
The telco had last year said the Sh2.15 billion acquisition of M-Pesa through a joint venture with Vodacom was going to give it full control of the brand, save it billions of shillings in royalties and give it room to cut fees.
Safaricom used to pay two per cent of its annual M-Pesa revenue to Vodafone while Vodacom has been paying five per cent in intellectual property fee.
Past attempts at separating MPESA from the main business were mooted by legislators.
In April 2019, a bill, Kenya Information and Communications (Amendment) Bill, 2019 proposed that Kenyan telcos, Airtel, Safaricom and Telkom, de-link their mobile money units from the main business.
Central Bank of Kenya opposed the idea urging caution.
In a submission to MPs, The Communications Authority of Kenya and Central Bank of Kenya warned a lot of investigation was required on the issue before forcing a split. The country’s principal secretary for ICT and Innovation, Jerome Ochieng, also opposed the move, adding it would potentially stifle innovation.
A week ago, the same issue was reignited by the senate.
In declaring that Safaricom is dominant and therefore needed to be split, the senators argued that other players—Telkom and Airtel—operate at the mercy of Safaricom as they owe it billions of shillings. Safaricom, according to the lawmakers, controls 60 per cent data bundles business, calls and Short Message Service (SMS).
They want Safaricom split into two so mobile telephony service is regulated by the Communication Authority of Kenya (CAK) and the M-Pesa division regulated by the Central Bank of Kenya (CBK).
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