Pedestrians walk past a mobile phone care centre operated by Kenyan’s telecom operator Safaricom in the central business district of Kenya’s capital Nairobi, May 11, 2016. REUTERS/Thomas Mukoya/File Photo
Vodafone’s Safaricom faces break-up call from Kenyan lawmaker
NAIROBI: A Kenyan lawmaker proposed breaking up Safaricom, the country’s biggest telecoms operator, on Tuesday because of its role in providing mobile financial services.
Safaricom, which is 40 percent owned by Britain’s Vodafone, not only has Kenya’s biggest number of subscribers, it also dominates the country’s thriving mobile-based financial services sector with its innovative M-Pesa platform.
M-Pesa has been widely hailed as an example of a developing region successfully adapting a new technology ahead of others and then exporting the idea globally, and as a “good news” story for African business.
Jakoyo Midiwo, the deputy minority leader in Kenya’s national assembly, said he was proposing amendments to laws on banking and communications to force Safaricom to separate M-Pesa, which is regulated by the central bank, from telecoms.
Such a move was necessary because Safaricom was offering banking services without the necessary licence, he added.
M-Pesa, which allows users to send money and make payments even on the most basic phones, has allowed Safaricom to partner with leading banks in recent years, giving it access to the lucrative small loans and deposit-taking business.
Vodafone says on its website that M-Pesa, which means “m-money” in Swahili, was launched in 2007 in Kenya, 2008 in Tanzania and is now present in 10 countries as the global brand for Vodafone’s Mobile Money service.READ MORE