Kenya’s regulatory authority has abandoned its proposal to split Safaricom into two separate entities, one focused on telecoms and the other one on financial services. The break-up plan was initially suggested in February 2017 following the regulator’s plan to reinforce competition in the sector.
Safaricom has 29.4 million subscribers and a market share of 71.9. Vodacom owns 35% of the operator, Vodafone owns 5%, whereas the remained share is owned by the Kenyan state.
Operators in the country have always claimed that Safaricom enjoys a dominant position since it accounts for 90% of revenues generated by voice calls and text messages. However, the latter rejected these claims after having argued previously that the regulator cares more about helping its smaller rivals rather than improving consumer access to financial services technology.
The Kenyan government criticized the regulator’s proposal while Vodacom threatened to withdraw from the country. However, Safaricom’s competitors Bharti Airtel and Telkom Kenya took sides with the regulator.
The operator plans to launch soon an e-commerce service allowing users to pay via its mobile money platform M-Pesa, which has put additional pressure on the regulator to ditch its plan to divide Safaricom.