Safaricom has appointed the head of its financial services division, Sitoyo Lopokoiyit, to head the newly created joint venture with South Africa’s Vodacom Group that will run the lucrative M-Pesa platform.
The two companies in April completed the acquisition of the M-Pesa brand from their affiliate Vodafone Group Plc in a Sh1.4 billion transaction.
Vodacom and Vodafone own a combined 40 percent stake in the Nairobi Securities Exchange-listed firm which pioneered the M-Pesa service in the local market.
Safaricom and Vodacom — which operates in South Africa and other markets in the region including Tanzania — plan to grow the platform beyond Kenya.
The appointment of Mr Lopokoiyit is part of the process to establish the joint venture’s leadership team.
“To realise our ambition, the M-Pesa Africa Joint Venture will be steered by a team of five leaders consisting of the commercial director, finance director, technology director, head of compliance and risk and the chief of financial services, Safaricom,” the telco said in a statement.
“This team will be led by/report directly to Sitoyo Lopokoiyit (Interim MD M-Pesa Africa).”
Safaricom said the joint venture will allow the parties to consolidate M-Pesa platform development, synchronise more closely product road maps, and improve operational capabilities into a single, fully converged unit.
“The joint venture will drive the next generation of the M-Pesa platform — an intelligent, cloud-based platform for the smartphone age,” Safaricom said.
Previously, Safaricom would pay Vodafone billions of shillings in fees for the rights to use the M-Pesa brand. The UK multinational owned the platform’s intellectual property.
The move to buy out the London-based firm will see Safaricom save on the fees besides gaining more autonomy to run the service in partnership with Vodacom.
Safaricom booked a one-time gain of Sh3.3 billion in the year ended March in relation to the M-Pesa buyout.
M-Pesa, which started as a person-to-person money transfer service in March 2007, recorded a 12.6 percent growth in revenue to Sh84.4 billion in the review period.
The platform’s revenues could soon overtake voice to become the company’s largest sales item.
SOURCE: BUSINESSDAILYAFRICA/ VICTOR JUMA