Safaricom’s plan to form a joint venture with Vodacom and acquire the intellectual property rights to M-Pesa requires regulatory and shareholder approvals in South Africa and Kenya.
Sunday 26, May 2019
Safaricom’s Chief Executive Officer said that the telecoms company plans to start a joint venture with Vodacom to acquire the intellectual property rights to the popular M-Pesa mobile financial services platform from Britain’s Vodafone.
Bob Collymore, Safaricom’s CEO, said that the EUR12 million ($13.4 million) deal will let both purchasers make significant savings in royalties paid to Vodafone and expand the service to new African markets.
Safaricom pays two per cent of its annual M-Pesa revenue to Vodafone, revenue from M-Pesa stood at KSH 75 billion $741 million) in Safaricom’s financial year to the end of March 2019.
Similarly, South Africa’s Vodacom, which owns 35 per cent of Safaricom, pays five per cent in an intellectual property fee to Vodafone from its M-Pesa business’ Tanzania unit.
The acquisition of the intellectual property rights by the new joint venture will allow the partners to more easily develop local products, such as Fuliza, an M-Pesa overdraft facility launched in Kenya in January.
Safaricom and Vodacom also want to launch into other African markets such as Ethiopia, where economic liberalisation plans put in place by a new prime minister last year have left firms scrambling to position themselves for entry, apart from developing new products based on the M-Pesa platform, reported Reuters.