Partnerships / Acquisitions

Vodacom, Safaricom To Acquire Rights To Vodafone’s M-Pesa

Kenya’s Safaricom has announced that it is partnering with Vodacom to acquire the intellectual property rights to the M-Pesa mobile financial services platform.

Last year Safaricom launched a new Bonga platform, described as a “conversational and transactional social network” that uses the M-Pesa mobile money product as a social network.

The deal, for 12 million euro ($13.4 million), will allow both companies to save in royalties paid to Vodafone. Safaricom currently pays 2 percent of its annual M-Pesa revenue, while Vodafone pays 5 percent in an intellectual property fee from its M-Pesa business. South African-based Vodacom also owns 35 percent of Safaricom, the most profitable company in East Africa.

“We are taking ownership of M-Pesa, the brand and the intellectual property — joint ownership between us and Vodacom — and we then use that as a platform for running into other markets across the continent,” Bob Collymore, Safaricom’s CEO, told Reuters.

Revenue from M-Pesa was reported at 75 billion shillings ($741 million) in Safaricom’s financial year at the end of March.

“More important than the significant savings is about us determining the future, the roadmap of M-Pesa, because at the moment the roadmap is determined by Vodafone,” Collymore said. “Given that the bulk of the M-Pesa business is in Africa, between Tanzania and Kenya, it is right for us to be determinants.”

The acquisition will also allow the partners to develop local products, such as Fuliza, an M-Pesa overdraft facility launched in Kenya earlier this year that currently has 8.8 million users.

In addition to developing additional products, Safaricom and Vodacom also have plans to launch into other African markets, with Collymore specifically mentioning Ethiopia as a target.

“We are watching Ethiopia closely because as we see the liberalization of the markets, both the mobile payments market, the telecoms market and the banking sector, we think there could be opportunities,” he said.

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