Safaricom is working on a joint venture with Vodacom Group to acquire the MPESA brand from Vodafone. The deal, when finalized, will cost the two companies $13.4 million. According to Collymore, acquiring the rights to MPESA will allow the partners to expand the platform’s footprint in Africa and develop more local products.
“We are watching Ethiopia closely because as we see the liberalization of the markets, both the mobile payments market, the telecoms market and the banking sector, we think there could be opportunities,” Collymore said.
- Speaking to The Africa Report in February, Collymore had said a successor should be, “Someone who understands the financial sector a lot more, if we are to occupy the fintech space, and someone who is not going to be scared of going into other markets.”
Vodacom Group also announced the acquisition when releasing its latest financial results two weeks ago.
Acquiring the rights to the brand will help both companies retain the revenue shares they currently pay Vodafone, and also open up new revenue streams. Safaricom currently pays 2 percent of its annual M-PESA revenue to Vodafone, while Vodacom pays 5 percent.
- Vodacom’s financial statements for the year ended 31st March 2019 showed that Safaricom contributed R.2.8 billion net profit. Vodacom Group now has 110 million customers, with 22 million of them in Safaricom, for its financial services across the group.
- “In South Africa, our profit before tax from Financial Services doubled to R1.0 billion, while M-Pesa revenue grew by 32.2% to R3.1 billion in our International operations and now makes up one-sixth (15.8%) of that portfolio’s entire service revenues” the company said in its statements.
In previous reports about the plan to enter the Ethiopian market, Safaricom would have provided back-end support and the technology, while Vodafone would license the MPESA brand to a bank, with Ethio Telecom carrying the service.