Safaricom of Kenya Braces for Competition on Key Cash Earner
Wednesday, November 5, 2014
Safaricom Ltd., East Africa’s biggest cellular-network operator, is bracing for competition in its key mobile-money business that helped boost first-half profit by 30 percent, Chief Executive Officer Bob Collymore said.
Bharti Airtel Ltd.’s Kenyan unit has begun rolling out a product with Equity Bank Ltd., the country’s largest lender, that offers clients the ability to do financial transactions using their mobile phones. Safaricom’s service, known as M-Pesa that started in 2007, handles transactions worth 121.3 billion shillings ($1.4 billion) a month and the product contributes about a fifth to revenue that grew 15 percent to 79.3 billion shillings in the six months through September.
“We have a strategy that has been approved by the board and we will focus on growing our partnerships and not competition,” Collymore said in an interview in Nairobi, the Kenyan capital. One such collaboration will enable Safaricom’s M-Pesa users to receive money from MoneyGram International Inc. (MGI:US)’s network of 345,000 locations around the world, the company announced yesterday.