Safaricom will not be forced to loosen its dominant hold on Kenya’s mobile-money market
Thursday, August 6, 2015
For a minute there, it looked like Safaricom might have to break up its business.
In July, as Quartz reported, Kenyan cabinet secretary Fred Matiang’i announced that the government would introduce new regulations aimed at guarding against monopolies, which could have led to Safaricom being declared anti-competitive and potentially split into three separate units.
But Kenya’s biggest mobile phone company can rest a little easier now after the country’s attorney general Githu Muigai instructed Matiang’i in a letter to his cabinet colleague to withdraw the proposals and “subject them to discussions.”
For Safaricom, the intervention comes at an opportune time. And while this does not mean Safaricom is completely out of the woods yet, it at least gives the company time to make its case to the regulator. Mobile-money transactions hit 1.3 trillion Kenyan shillings ($12.9 billion) in the first half of 2015 and Safaricom controls close to 77% of this market in Kenya, through its popular M-Pesa platform.