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Safaricom, Vodacom partner to grow M-pesa across Africa
Safaricom and Vodacom recently announced the completion of the acquisition of the M-pesa brand as well as product development and support services from Vodafone through a newly created joint venture. This move is expected to accelerate M-pesa's growth in Africa. Sitoyo Lopokoiyit, Safaricom Chief Officer for Financial Services joins CNBC Africa for more.
Wed, 08 Apr 2020 15:40:08 GMT
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AI Generated Summary
- Formation of a joint venture between Safaricom and Vodacom to accelerate M-Pesa's expansion in Africa and enhance product development and support services.
- Kenya's pioneering role in mobile money services with the successful evolution of M-Pesa, setting a precedent for growth in other African markets.
- Exploration of new opportunities in markets like Ghana and the Democratic Republic of Congo, showcasing Safaricom's commitment to consumer-centric strategies and market penetration.
Safaricom and Vodacom have recently finalized the acquisition of the M-Pesa brand, as well as the product development and support services, from Vodafone through a joint venture. This move is expected to propel the growth of M-Pesa across Africa. Sitoyo Lopokoiyit, Safaricom's Chief Officer for Financial Services, sheds light on the details of this strategic partnership. The initial launch of M-Pesa in 2006 marked a pivotal moment in the telecommunications industry. Initially viewed as a value-added service, Vodafone played a crucial role in supporting and investing heavily in M-Pesa. The ownership of M-Pesa, which was previously under Vodafone, has now been transferred to the joint venture between Safaricom and Vodafone. This joint venture signifies a new chapter for M-Pesa, with the brand and assets being brought back to Africa. Lopokoiyit elaborates on the significance of this step, highlighting the evolution of M-Pesa and its impact on mobile money services globally. The servers for M-Pesa were relocated from Germany and the UK to Kenya in 2015, underlining the importance of Africa as a hub for digital innovation. As Safaricom and Vodafone collaborate on this joint venture, a new company has been established to oversee the growth and development of M-Pesa across various markets in the region. This strategic move aims to harness the strength of both companies to drive M-Pesa's expansion and explore new opportunities within the mobile money sector. Despite the transition, M-Pesa's association with Safaricom remains intact, affirming Kenya's pioneering role in mobile money services. Lopokoiyit emphasizes the pride that Safaricom and Vodafone take in leading the mobile money revolution, with other African markets like Tanzania, Mozambique, Democratic Republic of Congo (DRC), Lesotho, and Ghana following suit. The success of M-Pesa in Kenya sets a promising precedent for its growth in other African countries. When discussing the prospects of expanding M-Pesa into new markets, including Ghana and the DRC, Lopokoiyit underscores the importance of consumer-centric strategies. With over 13 years of experience in mobile money services and a deep understanding of customer needs, Safaricom is well-positioned to navigate the diverse landscapes of these markets. The joint venture with Vodafone provides a unified approach to accelerate M-Pesa's presence and offerings, leveraging the talents and resources of both companies. Despite setbacks in obtaining a license for operations in Ethiopia, Safaricom remains committed to exploring opportunities in the region. The recent mobile money regulations in Ethiopia have sparked interest, prompting Safaricom to assess the potential impact and evaluate future prospects. In the quest for expansion, the Democratic Republic of Congo emerges as a key market for Safaricom. With a significant presence in the country and a strong foothold in mobile money services, Safaricom views the DRC as a compelling opportunity for growth. The vast population and evolving financial landscape in the DRC present promising avenues for Safaricom to deliver innovative solutions and deepen its market penetration. Lopokoiyit emphasizes the company's dedication to advancing financial services and telecommunications in the region, despite the challenges that may arise. As investors and experts express confidence in Safaricom's resilience and diversified offerings, Lopokoiyit underscores the company's evolution from a traditional telecommunications provider to a digital service provider. The breadth of products and services offered by Safaricom, ranging from telecommunications to financial services, healthcare, education, and agriculture, contributes to its robust performance and sustainability. While the Nairobi Securities Exchange reflects fluctuations in the telecom sector, Safaricom's multifaceted approach positions it favorably for long-term investments. As Safaricom navigates the impacts of COVID-19 on businesses globally, the company remains focused on transforming lives and driving economic growth across sectors. While specific financial outcomes are yet to be disclosed due to the close period, Safaricom's strategic vision and commitment to innovation continue to shape its trajectory in the digital landscape.
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