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Kenya’s Safaricom now wants a bigger slice of M-Pesa and has tabled a $13.4 million deal to buy it from British firm Vodafone

Safaricom Headquarters in Westlands, Nairobi
  • Safaricom together with its South African parent company, Vodacom, are set to enter into negotiations with British firm Vodafone to buy rights to the M-Pesa service.
  • Safaricom currently pays 2% of its annual M-Pesa revenue to Vodafone.
  • Income from M-Pesa stood at Sh75 billion ($741 million) in Safaricom’s financial year ended March 2019.

Kenya’s telecommunication giant, Safaricom now wants a bigger slice of lucrative mobile money transfer service, M-Pesa.

Safaricom together with its South African parent company, Vodacom, are set to enter into negotiations with British firm Vodafone to buy rights to the M-Pesa service in a deal estimated to be worth Sh1.3 billion ($13.4 million).

Safaricom CEO, Bob Collymore, who was set to leave the firm but got his contract extended by one year, told Reuters news agency the purchase of M-Pesa rights will yield significant savings in royalties paid to Vodafone and expand the mobile money service to new African markets.

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“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,” Mr Collymore told Reuters.

Safaricom currently pays 2% of its annual M-Pesa revenue to Vodafone while Vodacom, a South African telco operator that owns 35% of Safaricom, pays 5% in an intellectual property fee to Vodafone from its M-Pesa business, which is mainly in Tanzania.

Vodafone has a 5% stake in Safaricom while the Kenyan government controls 35% shareholding.

Income from M-Pesa stood at Sh75 billion ($741 million) in Safaricom’s financial year ended March 2019. Safaricom net profit grew by 14.7% to Sh63.4 billion in the financial year ended March 2019 on the back of strong M-Pesa and mobile data performance, marking the seventh straight year of a growing bottom-line.

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