Safaricom Rolling out Mobile Money after the Sale of Vodafone Stake
In May 2017, Vodacom announced it had agreed to buy from its parent company Vodafone, a 35% stake in Safaricom, a Nairobi-based mobile network operator company for USD 2.6 billion. The sale of such stake will enable Safaricom to look to new markets as it is now planning to expand its popular mobile-banking service M-Pesa into other African countries such as Nigeria and Angola. This move is expected to expose the company to growth opportunities outside its home country where it is under pressure from lawmakers and regulators with respect to its dominance in the market.
M-Pesa has more than 25 million customers in eleven countries including Kenya, Tanzania and Ghana. In Kenya, M-Pesa dominates the market with about 80% of mobile banking transactions being made over its platform which generated approx. USD 8.2 billion in the third quarter of 2016.
Vodafone, a UK-based mobile-phone company has an agreement with the South African government to only expand in Africa through Vodacom its majority owned subsidiary based in Johannesburg, South Africa.
“Before the end of the year, I would expect to have something to roll out. Safaricom may seek to agree to platform-sharing deals with competitors such as MTN Group to expand M-Pesa rather than set up in new countries”, said Robert Collymore the CEO of Safaricom