Safaricom in fresh battle to foil telco-M-Pesa split

Kenya’s leading telco by market share, Safaricom has once again been thrust in the vicious fight to separate its telco (Safaricom) and mobile money tranfer and payments (M-Pesa) businesses as competitors continue to lobby to have the firm declared a dominant player.

Safaricom currently enjoys 63.3% of the market share putting it miles ahead of it’s closest competitor Airtel which enjoys 23.4% of the market, however, the former has lost subscribers for five consecutive financial quarters.

Gem MP Elisha Odhiambo, the author of the Kenya Information and Communications (Amendment) Bill, 2019 has revived attempts to compel telcos to separate their core businesses from other subsidiaries.

The move will see Safaricom and M-Pesa registered separately which would have direct implications on taxation.

“A person may engage in any other business provided that such person shall; obtain the relevant licenses from the respective regulators of any industry or sector ventured into,” part of the bill reads.

The bid to separate the two subsidiaries dates back to 2015 when former Attorney General Githu Muigai blocked former ICT Cabinet Secretary Fred Matiang’i’s bid to split the firm amid strong support from Airtel and the Communications Authority of Kenya (CA).

{Read: Airtel eats into Safaricom: Gloves off in data bundle war}

Githu faulted Matiang’i for drafting the regulations and sending them to parliament without consulting him and asked him to withdraw them.

“Drafting of the regulations and forwarding to Parliament has been done without the input of this Office as per the agreed procedure for the preparation of legislation or of the CAK (Competition Authority of Kenya), the expert body in matters relating to competition under the Competition Act,” Githu said in a letter to Matiang’i.

The regulations were to act as a guideline on how the proposal would be enforced.

Safaricom chief executive Bob Collymore in a guest column in a local newspaper last year decried the firm was being targeted for its successes.

{See also: For Safaricom and Airtel, blow after blow in interminable price wars}

What’s more, former Gem MP Jakoyo Midiwo also led a spirited fight to have the two firms separated saying that the firm was offering banking services without the requisite licences.

He however lost in the 2017 general elections and his succesor has taken over from where he left.