kenya: debate to Split Mobile Money from Telcos Enters Second Reading

A fresh debate has arisen in Kenya over a legislative bill that seeks to split mobile money services like M-Pesa, Airtel Money, and T-Kash from their parent telecom companies. This push is part of the Kenya Information and Communications (Amendment) Bill, 2022, which aims to require these services to operate under the same regulatory framework as banks, with separate licenses issued by the Central Bank of Kenya (CBK). 

Proponents of the bill argue that separating mobile money from core telecom operations will allow for increased oversight in a rapidly growing sector. The move is seen as necessary to address Safaricom's dominant market position, which holds a 95% share of mobile money services. However, Safaricom has opposed the bill, claiming it would stifle innovation and negatively impact their ability to respond to market needs. The company also warns of a significant tax liability—around Sh75 billion—if the separation is enforced.

The bill has already passed its second reading in Parliament and is awaiting further discussions, with lawmakers set to decide whether to move forward with the separation. This is not the first attempt to split mobile money from telecom services; a similar effort in 2021 was unsuccessful due to resistance from the telecom industry. If passed, the law could reshape Kenya's telecom and financial landscape significantly.