M-Pesa may soon be forced to split from Safaricom and work independently.
Safaricom has always been the untouchable telcom however they are not invisible to the Kenyan parliament who are now pushing for a split between it’s mobile services and mobile money service M-Pesa. The idea behind this new idea is to push the two to work separately that will operate under different boards, brands and regulators.
This would mean that M-Pesa will now be regulated by the Central Bank of Kenya while Safaricom will be under the Communications Authority of Kenya. The new proposal came from a well-known British firm, Analysys Mason, which gave advice that the two should indeed be separate entities.
The consequences Safaricom will have to face.
If this new proposal is implemented Safaricom will have a number of challenges. The idea behind this new proposal is to give others a chance to also have a fair chance and get rid of monopolizing. There’s no denying that Safaricom is the mobile service and mobile money giant telco in Kenya. Currently they control % for mobile subscriptions 68% for data and up to 99% for mobile money. M-Pesa has been the biggest highlight for Safaricom especially at a time when there’s need for a cashless system.
For most telcom operators the use of mobile money and data seem to the only area where they can make reasonable profit. Recently, banks and other mobile money operators have been pushing for the waivers on fees for mobile money transactions to be removed because of the losses companies are making.
The intention as to why the Government chooses to be involved in this move seems a bit unclear. In Ghana, the government is preparing takeover stakes from Airtel’s operations it seems the government always have their own agenda’s.