Safaricom may expand its popular mobile banking service M-Pesa into countries such as Nigeria and Angola, as East Africa’s biggest company grapples with regulatory scrutiny in its home market of Kenya.
The sale of a 35% stake in the Nairobi-based company to Vodacom by parent Vodafone has enabled Safaricom to look to new markets, CEO Bob Collymore said in an interview at his office in the Kenyan capital. That’s because Vodafone has an agreement with the South African government to only expand in Africa through Vodacom, its majority-owned Johannesburg-based unit.
“Before the end of the year, I would expect to have something to roll out,” Collymore said. Safaricom may seek to agree to platform-sharing deals with competitors such as MTN to expand M-Pesa rather than set up in new countries, he said.
The expansion of the mobile banking service would be Safaricom’s first significant move since Vodacom’s R35bn stake purchase last month and will allow the company to examine growth opportunities outside its home country, where its market-leading position is under pressure from regulators.
M-Pesa — pesa means money in Swahili — had more than 25m customers in 11 countries such as Tanzania and Ghana at the end of March, proving popular in countries without developed banking systems.
In Kenya, 79% of mobile banking transactions are made over M-Pesa, which processed 851bn shillings (R105bn) in the third quarter of last year. Safaricom shares have gained 19% this year, valuing the company at 911bn shillings.
Kenya’s telecommunications regulator is finalising a market study on Safaricom’s dominance of the industry amid calls by some lawmakers for the company to be broken up. The report will probably conclude that while Safaricom isn’t abusing its market position, it should be ordered to share infrastructure and say up-front when it plans to change prices or introduce new offers, Collymore said.
“We are not objecting to share, because sharing means you get additional revenue,” the CEO said. “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?”
The release of the regulator’s report has been delayed by the expiry of the Communications Authority of Kenya chairman Ben Gituku’s three-year term in office last month and the fact that no replacement has been found yet, director-general Francis Wangusi said last week. — Reported by Bella Genga, (c) 2017 Bloomberg LP