Kenya’s biggest telecommunications company; Safaricom and its South African parent company; Vodacom, are reportedly set to enter into negotiations with British firm; Vodafone to buy the exclusive rights to the M-Pesa service.
The deal is estimated to be worth $13.4 million (1.3 billion Kenyan Shillings).
CEO of the telecommunication firm; Bob Collymore, told news agency; Reuter’s, that the purchase of M-Pesa rights will yield significant savings in the royalties paid to Vodafone and expand the mobile money service to new African markets.
He added that “More important than the significant savings is about us determining the future, the roadmap of M-Pesa because at the moment the roadmap is determined by Vodafone,”.
Safaricom currently pays two percent of its annual M-Pesa revenue to Vodafone.
In Safaricom’s financial year which ended in March 2019, income from M-Pesa stood at $741 million (75 billion Kenyan Shillings).
Vodacom, the South African telco operator which owns 35 percent of Safaricom, in turn pays five percent in an intellectual property fee, to Vodafone from its M-Pesa business, which is mainly in Tanzania.
Vodafone has a five percent stake in Safaricom while the government controls 35 percent shareholding.
Bob Collymore also announced the extension of his tenure by one year on Thursday, the 23rd of May 2019. It was initially due to end in August 2019.
The extension pushes his tenure forward, until August 2020.
The CEO stated that the extension is to allow him to compensate for his nine month absence last year, due to his medical leave.
In a response to questions from reporters on the sidelines of The Africa Shared Value Summit held in Nairobi, Mr. Collymore said; “I owe the company about a year because I was sick for a year so I’ve extended by another year. I will be here until 2020 to continue hopefully serving the company and the country,”.
The extension is also seen by observers as providing room for the firm to figure out Bob Collymore’s successor.
Mr Collymore further said that he intends to focus on the company’s e-commerce sector, which he stated has not been performing as well as expected in recent years.
“In the next 12 months that I will be the CEO, we want to get e-commerce working better and scale up agri-business, which is one of the country’s major sectors in generating revenue,” – Bob Collymore.
He also intends to boost the agri-business unit.
The company’s success has been built on innovation and very creative marketing that has allowed it to gain a dominant market share in SMS, voice, data, as well as mobile money services while rivals in return, try to lure customers with cheaper prices.
Mr. Collymore, who is a Guyana-born British citizen, took charge of Safaricom in 2010 on a three year contract, after the company’s founding CEO, Michael Joseph, retired.
Mr. Collymore took a medical leave in October 2017, to receive specialised treatment.
He resumed work in August last year 2018, after a nine month medical leave, and revealed that he had battled acute myeloid leukaemia, a type of cancer that inhibits white blood cell production.
The cancer has since gone into remission. Mr. Collymore confirmed this on his return.
During his absence, Safaricom’s Chief Financial Officer; Sateesh Kamath, had taken on a primary role to fill the CEO’s position. He was supported by Joseph Ogutu the company’s Director of Strategy and Innovation, who took charge of Safaricom’s day-to-day operations until Mr Collymore’s return.
