November 23

Viewpoint: A Safaricom Split Is a Telco’s Dream and a Fintech Startup’s Nightmare

By Elizabeth Ajao

Talks of splitting up Kenya and East Africa’s dominant telco, Safaricom, previously gathered interest about five years ago when the Kenyan parliament stepped up calls to break the all-conquering telco into two fragments.

This attempt sought to guard against monopoly in the Kenyan telecommunications space. But as time passed, the issue was swept under the carpet.

Once again, in 2017, a UK-based consulting firm, Analysys Mason (AM) was contracted to carry out a consultation about the competition in the telecommunications market in Kenya. Analysys Mason’s leaked report made certain recommendations to the Kenyan government.

The recommendation advised the splitting of Safaricom. That is, the separation of Safaricom’s telecommunications business from its indomitable mobile money service, M-Pesa, which has a 99 percent market share. However, this recommendation was later abandoned, and once again, the matter was shelved.

It’s November 2020 and talks of dismantling Safaricom have come up once more. As with the two previous instances, there have been several back-and-forths on the matter.

Photo courtesy of Pexels.

Source: Weetracker (link opens in a new window)

Technology, Telecommunications
fintech, startups, telecommunications