Leading communications services provider Safaricom could be forced to break off M-Pesa from its core business if a new Bill is passed into law.
This follows proposed amendments to the Kenya Information and Communications (Amendment) Bill, 2019, spelling out a new licensing framework for Kenyan telecommunication service providers.
“A person may engage in any other business provided that such person shall obtain the relevant licences from the respective regulators of any industry or sector ventured into, legally split or separate the telecommunication business from such other business and provide separate accounts and reports in respect of all businesses carried out,” explains the Bill in part.
The Bill, which gives telcos six months to comply, is sponsored by Gem MP Elisha Odhiambo, who made a similar attempt in 2019.
The proposed law, if passed, could have a disruptive impact on industry leader Safaricom, which has in recent years upgraded M-Pesa into a digital platform that is poised to be the telco’s biggest revenue driver.
Data from the company’s latest financial results indicates that revenue from voice stood at Sh39.8 billion for the first half of the 2022-23 financial year, a 3.8 per cent drop compared to 42 billion the previous year, while M-Pesa revenue went up 8.7 per cent to Sh56.8 billion.
Earlier this year, Airtel Kenya announced the separation of its mobile money to a new entity, Airtel Money Kenya.
“Following this business separation, Airtel Money Kenya Ltd will take over and continue the provision of the Airtel Money Services in collaboration with the licensed telecommunications network of Airtel Networks Kenya Ltd,” said the firm in a statement.
“The continued use of the Airtel Money Service shall be deemed as proof of the customer’s acceptance of the transfer of their Airtel Money account and related customer data and or sharing of the customer data between Airtel Money Kenya Ltd and Airtel Networks Kenya.”
The proposal is likely to be met with stiff resistance from Safaricom, which has long maintained that the success of M-Pesa is tied to the company’s GSM business.
"We've always said M-Pesa and Safaricom have benefited millions of Kenyans and one of the reasons is because they are together," said Safaricom Chief Executive Peter Ndegwa at a press briefing earlier this year.
"You need the GSM business to provide the services to individuals, including those who have feature phones, and that is why the two being together is very important."