This archive report was first published on 5 November 2019.
Safaricom's M-Pesa Revenue Surpasses Voice as Company Resists Business Split ¶
As of September 2019, Safaricom's mobile money platform, M-Pesa, had generated Sh41.97 billion in revenue, a 18% increase from Sh35.52 billion in the previous year. This growth has made M-Pesa the company's largest revenue contributor, surpassing voice revenue.
However, Safaricom is resisting a proposal to split its mobile money business from its traditional telecommunication business. The proposal, which is part of the Kenya Information and Communications (Amendment) Bill, 2019, would require service providers to separate their mobile money business from their core telecommunication activities and register the new entities with the Central Bank of Kenya (CBK).
According to Safaricom Chairman Nicholas Ng'ang'a, the proposed amendments do not support the growth of the industry and may end up dampening the investor markets. He urged caution, stating that separating M-Pesa from the other Safaricom businesses might be detrimental for the other revenue streams, especially voice and messaging which are already on a decline.
The Kenya Information and Communications (Amendment) Bill, 2019, is currently undergoing a public participation phase and will require service providers to carve off their mobile money business and register the new entities with the CBK. Safaricom, Airtel, and Telkom Kenya would have to separate their mobile money offering from their core telecommunication activities to create new companies with separate accounts regulated by the CBK.
The Bill gives the telcos six months from the date it is signed into law to effect the separation. Safaricom is concerned about the proposed amendments and the potential impact on its business.
