Safaricom is considering an extension of its successful M-Pesa mobile banking service into more African markets, including Nigeria and Angola.
CEO Bob Collymore stated: “Before the end of the year, I would expect to have something to roll out”, and noted that the operator could pursue platform-sharing deals with rival firms such as MTN Group to push M-Pesa into new markets without having to establish its own operations.
Safaricom has been freed up to move into new African markets following Vodafone’s sale of a 35% stake in the Nairobi-based operator to its majority-owned South African unit Vodacom for $2.6B. A prior agreement between Vodafone and the South African government specifies that the group may only expand in Africa via Vodacom.
M-Pesa has spread into 11 markets including Tanzania and Ghana, and across its entire footprint boasts over 25 million subscribers. In its home market of Kenya, M-Pesa is used for around 79% of mobile banking transactions, with $8.2 billion processed in Q3 2016. However, the service’s dominance in Kenya has come under scrutiny from the country’s regulator, with some lawmakers arguing that M-Pesa should be spun off into a separate company.
A report into the issue is expected to conclude that while Safaricom is not abusing its dominance, it should have to share infrastructure and be more transparent about pricing and offers. However, since the three-year term served by the Communications Authority of Kenya Chairman Ben Gituku expired last month, the report’s release has been delayed as no replacement is forthcoming.
“We are not objecting to share, because sharing means you get additional revenue,” said Collymore. “What we are losing sleep about is compelling us to share at a regulated price. If you are going to start to regulate how much we are going to charge, we are going to have a problem. We’re going to have a fight about this one, because why would my investors invest?”