Safaricom may be forced to cut off M-Pesa from its main portfolio. This is if the Communications Authority (CA), implements recommendations of a market dominance report.
The move to separate Safaricom from M-Pesa, known as functional separation, is the main point of the report prepared by Analysys Mason, a group of international consultants.
“The two businesses would be required to operate in separate offices, with separate staff below board level, separate branding, separate accounting and separate business operations and support system, customer support systems and management information systems,” the report says.
According to this report, Safaricom was found to be able to set its tariff independently and without factoring in the market, which has seen its customers pay more relative to other mobile money markets across the world.
The report further notes that preferential treatment given to Safaricom partners such as the Commercial Bank of Africa (CBA) and the Kenya Commercial Bank (KCB) could be deemed uncompetitive.
According to Kenya’s Business Daily newspaper, the proposed wallet-to-wallet interoperable system would allow a consumer to keep cloud accounts across the platforms of different mobile companies, making it possible to move and shift money between accounts as one chooses.
However, the move to hive off M-Pesa from Safaricom would increase Safaricom’s operational costs as it would come with a duplication of support services.
Other key recommendations in the report include a proposal that Safaricom should provide 2G, 3G and 4G roaming on its network through regulated tower sharing for a period of five years.
