Kenya’s largest and most profitable company Safaricom plans to convert into a holding company that will house the telecommunications business, the M-Pesa Mobile money business and Ethiopian unit as subsidiaries.
In an interview with local newspaper The Standard, the CEO of Safaricom Peter Ndegwa said they don’t plan to split the M-Pesa from Safaricom despite numerous calls and pressure.
“What we intend to do though as ourselves is to create a group structure so Safaricom Plc becomes a group, and then you have different businesses”
Other businesses that Safaricom intends to house in the holding company include Digi Farm, a new tower company that they are currently setting up and any other company they might acquire in future.
According to Mr Ndegwa, the reason Safaricom has been successful with its customers is that mobile money is part of the GSM business.
“Although we work in separate teams – the actual M-Pesa team is very different – but they rely on the network that the GSM side has. They rely on the distribution network,” Ndegwa was quoted by the paper.
Safaricom’s closest competitor Airtel Networks Limited recently completed the separation of its mobile money business from its telecommunications services. The transfer saw a new entity – Airtel Money Kenya Limited (AMKL) take over the running of Airtel’s mobile-money unit.
Asked on the split, Mr Ndegwa says that Airtel split because they wanted to raise money. “And they needed to do it at an African level. They wanted to monetise their mobile financial business.”
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