Safaricom won’t let rivals share M-Pesa

Safaricom has maintained it will not allow its mobile money platform, M-Pesa, to be spun off from the parent company, citing security risks for subscribers due to lack of clear guidelines and standards on cross-network cash transfers.

Fair Competition and Equality of Treatment, 2015 regulations contained in the Communications Act—yet to be tabled in parliament—require Safaricom to manage separate books of accounts for each of its services such as M-Pesa, voice and data as well as infrastructure because it is considered a dominant player that is abusing the market on the segments.

The mobile operator yesterday told the Senate Committee on ICT that mobile money interoperability is yet to achieve scale because of lack of a common national and global infrastructure, compounded by poor implementation standards.

These factors, Safaricom chief executive Bob Collymore said, could result to high implementation costs for operators, escalate risks associated with customer fraud and increase blacklisting for subscribers.

“We are not against mobile money interoperability, but lack of proper guidelines could expose us to risks. Policy on the model is half-baked and could potentially lead to loss of money through fraud,” he said. Mobile money interoperability is driven by Kenya Bankers Association and Central Bank of Kenya.

“The policy has not also highlighted the commercial basis for running the business,” said Collymore. Airtel and Equity are banking on Thin Sim technology launched in the market last week to eat into the mobile money business dominated by Safaricom.

Safaricom was summoned by the committee, with the latter seeking to get the operator’s views on anti-competitive behaviour laws set for fresh review. The committee has already met with Airtel. The mobile services leader stood its ground that it will not let its services be split into separate entities, claiming its business is done on merit with no intention of fighting local firms.

“It’s the foreign firms that want to break a national company. We are not that big…we are actually fighting bigger multinationals such as Microsoft and Google that are making entry into the market.

They made success out of innovation,” said Collymore. Senate committee member and women representative Joy Gwendo raised concerns that Safaricom was still enjoying exclusivity in a number of top retail chains for its mobile phones, airtime trade and mobile money transfer.

However, the operator dismissed the claims, asserting it had already made a decision to tame dominance across its 85 agent networks. “But this takes time, retailers also have a choice. We don’t have any contractual agreement with retailers,” said Collymore.

SOURCE:MEDIAMAX