Safaricom, Vodacom Move To Purchase M-Pesa Rights

Safaricom has announced plans for a joint venture with Vodacom that will see it acquire rights to the M-Pesa mobile financial services platform from Vodafone. 

Safaricom CEO Bob Collymore is reported by Reuters as stating, “We are taking ownership of M-Pesa, the brand and the intellectual property. Joint ownership between us and Vodacom and we then use that as a platform into running into other markets across the continent.”  

M-Pesa currently generates revenues of around $741 million for Safaricom. Under the current arrangement the firm pays two per cent of the revenue to Vodafone. Following the $13.4 million deal Safaricom and Vodacom will save on royalties, and secure the opportunity to expand the service to additional markets in Africa. 

“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… Given that the bulk of the M-Pesa business is in Africa, between Tanzania and Kenya, it is right for us to be determinants,” Collymore told Reuters.

He pointed to Ethiopia as a potential area of opportunity for the firm following moves towards liberalization of the markets.