The possibility of popular mobile money service; M-pesa’s separation from telecommunications giant; Safaricom has been one topic of conversation among lawmakers in Kenya and observers alike.
Although the top brass and other members of staff at Safaricom disagreed with the suggestion and the former Chief Executive Officer (CEO) the late Bob Collymore stating at a point that Safaricom should not be punished for its successful, the split has continued to come up at various times over the years as a result of the belief that Safaricom has grown too large and will be more effectively run if the mobile money service; M-Pesa was made an entirely separate business from the telecommunications company.
While the belief in question with regards to Safaricom being too big for other telecommunications companies to compete with fairly has never been put forward explicitly, an examination carried out by a British company; Analysys Mason, revealed that a large portion of Safaricom’s mobile money and carrier operations have provided it with a significant advantage. Analysys Mason was also the first to suggest the idea that Safaricom and M-Pesa should be split into seperate entities. It made the suggestion back in 2017.
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The evaluation by Analysys Mason was at the time, carried out with the approval of the Communications Authority (CA) which is the Information Communicating and Technology (ICT) regulatory body in Kenya.
In 2020 Senators in Kenya explored the possibility and agreed that the Safaricom and M-Pesa split was needed. They felt that the separation of both businesses could encourage more competition as Airtel Kenya and Telkom are currently capable of competing successfully with Safaricom.
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The Senators also suggested that the telecommunications company; Safaricom could remain under the Communications Authority (CA) while M-Pesa would be under the Central Bank of Kenya (CBK).
Members of Parliament (MPs) not long after, disagreed with the proposed split. All Members of Parliament apart from two (2) went against a new Bill which would have introduced a split that would apply to all other telecommunications companies operating in Kenya.
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The proposed Bill which was called the Kenya Information and Communications (Amendment) Bill, was sponsored by Elisha Odhiambo who was at the time serving as the MP for Gem.
Safaricom also revealed that it will be split. Some believe that the decision and announcement were as a result of pressure from legislators overtime.
The Chief Executive Officer (CEO) of Safaricom; Peter Ndegwa stated that the separation of the telecommunications company and M-Pesa, will result in the creation of a holding company. Said holding company will be charged with managing Safaricom’s mobile money services, its data services, towers, as well as the Ethiopian branch of Safaricom.
Safaricom’s Ethiopian arm has already begun its operations with services now available in three (3) cities so far.
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In the words of Safaricom’s Chief Executive Officer (CEO), “In the future, we expect there will be a holding company, probably the listed business and there will be quite a few businesses that operate under Safaricom we are also able to monetize some of the assets we have for example the towers that we could lease in the future so probably have tower company.”
While Safaricom is already sharing its Paybill and But Goods set up with Airtel Kenya and Telkom, interoperability will be in effect in Kenya by 2024.
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Airtel Kenya has already implemented the separation of Airtel Money from the other services it offers. Airtel Money is its very own mobile money services.
The move makes it the first telecommunications company in Kenya to carry out the split.
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Although Telkom Kenya was scheduled to carry out a similar split with its T-Kash mobile money service, it is yet to do so.
The Governor of the Central Bank of Kenya; Patrick Njoroge stated that the rest of the separations could be carried out as early as January 2023. This means T-Kash and M-Pesa will join Airtel Money in the league of being seperate entities from their respective parent telecommunications companies.
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