Safaricom Bids To Loosen Vodafone’s Grip On M-Pesa Earnings

VENTURES AFRICA – Kenyan telecom operator, Safaricom is set to increase profit on M-Pesa with the renegotiation of the popular mobile money platform’s procurement agreement with its parent company Vodafone.

Safaricom, which operates M-Pesa, a fast-growing mobile money transaction service in Kenya, with over 14.9 million active users, on a license from Vodafone Sales and Services Ltd (VSSL) pays a 25 percent licence fee under an agreement.

The Kenyan teleco also pays at least 10 percent of revenue from M-Pesa, whether the venture is making profits or not.

Safaricom’s bid to renegotiate the terms is in order to loosen Vodafone’s stringent grip on the revenues from M-Pesa as it is no longer news that the contract favours its parent company.

In the year ended March, Vodafone earned at least 1.7 billion shillings ($20 million) from M-Pesa alone.

M-Pesa was developed between Safaricom and Vodafone, and launched in 2007. The mobile service is not just used in cities or by big commercial interests but by all. By 2010, over 50 percent of Kenya’s population had ued the M-Pesa service – this percentage cuts across rural villagers, youths, business people e.t.c.