Changes to Kenyan law could force Safaricom to split off its successful mobile money business, M-Pesa. Vodafone, which owns 40% of the operator, has slammed the proposal, with Michael Joseph, who heads Mobile Money for the company, saying it would amount to “punishing success”.
Joseph founded M-Pesa while he was CEO of Safaricom, and the simple, SMS-based payments system has had a significant impact in Kenya, and other markets where Vodafone has launched it subsequently.
Joseph said the Kenyan proposals would increase the cost of making cash transfers in Kenya, and put companies off making investments in the country. He said in an interview with local journalists: “The whole idea that you want to split a company up because it is successful to me is just completely ridiculous. You are punishing success. Why would you do that?”
Kenya’s information minister Jow Mucheru has also criticised the proposal, which has been made in the context of a broader assessment of Safaricom’s dominant position in the wireless market, where it has 69% share.
He said an enforced spin-off would “make Kenya a very unattractive destination for tech companies that want to come and innovate”.
According to GSMA Intelligence, the other main players in Kenya are Airtel, with 17% of the mobile market by subscribers, and Orange-owned Telkom Kenya on 14%. M-Pesa’s share of the mobile money sector is estimated at 66%.