Vodacom Group sees the expansion of mobile banking services into new markets in sub-Saharan Africa as a top priority following a shareholder vote to rubber stamp its purchase of a 35% stake in Safaricom, Kenya’s biggest company.
“We will use Safaricom to enter other markets where neither Vodacom nor Safaricom are,” CEO Shameel Joosub said in an interview at the wireless carrier’s AGM in Johannesburg on Tuesday. The two businesses have a combined 30m mobile-banking customers, giving them “a very sizeable platform on the continent”, he said.
Vodacom’s purchase of the Safaricom stake from UK parent company Vodafone Group gives the South African company access to the fast-growing M-Pesa platform, which processed about 891bn shillings (R110bn) in the three months to March, or more than 75% of Kenya’s total, according to the country’s telecommunications regulator. Entering markets through its financial services platform will allow Vodacom to access countries without having to purchase a voice licence, Joosub said.
Mobile payments are popular in countries with limited banking infrastructure, which includes much of sub-Saharan Africa outside of South Africa, Vodacom’s biggest market. The company plans to compete with the mobile money services of Millicom International Cellular, Bharti Airtel and Orange, Joosub said.
Vodacom shares declined marginally to R173.34 at the close in Johannesburg, valuing the company at R258bn. Almost all shareholders voted in favour of the Safaricom deal at the Tuesday meeting. — Reported by Loni Prinsloo and Janice Kew, (c) 2017 Bloomberg LP