Safaricom might once again need to fight to hang on to its popular M-Pesa mobile finance operation.
A new amendment to Kenya's Information and Communications Bill could demand that telecom operators to split their auxiliary businesses into separate companies.
The Standard reported that a new proposal to the Bill has been tabled by Elisha Odhiambo, MP for Gem, that would require telcos to spin off their non-core services and seek approvals for operation from respective regulators. Odhiambo plans to present the amendment to the Parliament in the coming days. If voted through, the bill would give Safaricom, Airtel and Telkom just six months to offload their mobile money businesses into separate companies and seek approval from Kenya's central bank for them to operate.
In 2015, Dr Fred Matiang'I, the then Cabinet Secretary in the Ministry of Information, Communications and Technology (ICT), made a similar proposal in view of Safaricom's dominant position, according to an earlier report by The Standard. After that, the proposal was put forward by the former MP for Gem, Washington Jakoyo Midiwo, in 2017 following a recommendation included in the preliminary report delivered by consultancy Analysys Mason. The 'Telecommunication Competition Study' was commissioned by the Communications Authority of Kenya (CA) in 2016, and preliminary findings and recommendations delivered a year later.
Money transfers over mobile, on the other hand, are not banking services -- the handlers do not invest the depositors' money but merely move it from one place to another. In effect it is a digital reincarnation of a postal service, which has traditionally been under the same regulatory regime as telecom in many countries. Meanwhile, payments -- and mobile payments in particular -- are normally classified under non-banking financial services. A uniform law to demand a formal separation of all non-telecom businesses from the operators' core communication business errs on the heavy-handed side. It may also, as Joe Mucheru, the Cabinet Secretary in the Ministry of Information and Communications, said when rebutting Midiwo's earlier spin-off proposal, "punish innovation."
The introduction of 4G mobile broadband services across Africa has been transformative for individual users, businesses and economies, as well as the continent's mobile operators, but now the world is getting excited about the potential of 5G.
This webinar looks at the evolving role of 4G across Africa and how 5G will play a role in the development of digital, connected economies.
This webinar is part of the Connecting Africa Digital Series, which is produced in association with AfricaCom.