Bad news ! Safaricom to disjoint with MPESA January 2023

Over the last few years, there has been debate on the separation of M-Pesa from Safaricom’s core business. The arguments for both sides have been valid. But Safaricom hasn’t been keen to embrace this.

There are those who have argued that M-Pesa is way too big. And important to Kenya’s economy for it to be under the control of Safaricom.

There was even a discussion in the Senate pushing for this separation. Arguing that if it happens, Safaricom will be under the Communication Authority while M-Pesa will be under the CBK.

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Level the playing field

The discussion also made it clear that separating M-Pesa from Safaricom will level the playing field for Airtel and Telkom. These two players haven’t been able to keep up with Safaricom over the years.

It now looks like the separation will be happening sooner than we thought according to Techweez. CBK Governor Patrick Njoroge has also said that the split should happen as soon as January 2023.

Safaricom is also embracing this as its CEO, Peter Ndegwa, has said that the separation, will see the establishment of a holding company.

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The different arms

That will manage the different arms including the mobile money services. Data services, towers and even the Ethiopian division.

Peter Ndegwa has also been quoted saying, “In the future, we expect there will be a holding company. Probably the listed business and there will be quite a few businesses that operate under Safaricom.

We are also able to monetize some of the assets we have. For example the towers that we could lease in the future so probably have tower company.”

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A good thing

I think separating M-Pesa from Safaricom might be a good thing as if handled correctly. It can morph into a bigger and innovative entity on its own while at the same time Safaricom grows even bigger.

Airtel Money was recently separated from Airtel Kenya.

T-Kash was also expected to be established as an independent entity from Telkom but that is yet to happen.