Kenya’s largest mobile operator Safaricom have announced they are planning to launch a joint venture with Vodacom to acquire the intellectual property rights to the M-Pesa mobile financial services platform from Britain’s Vodafone, Safaricom’s CEO said on Thursday.
According Safaricom’s CEO Bob Collymore, who revealed on Thursday that he was staying at the helm of the company for another year, the $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 currently pays 2 percent of its annual M-PESA revenue, which in the last financial year stood at Ksh 75 billion, to Vodafone. Vodafone also holds a 5 percent stake in Safaricom.
Vodacom, a South African operator which owns 35 percent of Safaricom, pays 5 percent in an intellectual property fee to Vodafone from its M-Pesa business, which is predominantly in Tanzania.
The acquisition of the intellectual property rights by the new joint venture will make it easier for the partners to develop local products. Collymore highlighted Fuliza, an M-Pesa overdraft facility launched in Kenya, which was launched in Januaryand is operated jointly with two local banks, which has garnered 8.8 million users who have borrowed a combined Ksh 45 billion shillings.
Apart from developing new products based on the M-Pesa platform, Safaricom and Vodacom also want to launch into other African markets, such as Ethiopia.
The proposed joint venture still requires regulatory and shareholder approvals in South Africa as well as regulatory approval in Kenya.