Safaricom Plans M-Pesa Entry in New African Market by April
(Bloomberg) -- East Africa’s biggest company by market value plans to introduce its M-Pesa mobile-money service in at least one other country by the end of its financial year in March.
Safaricom Plc. intends to recruit people with mergers and acquisitions skills for the transaction so the company can “push the agenda a little bit faster,” Chief Executive Officer Bob Collymore said in an interview in the Kenyan capital, Nairobi, after announcing a 20 percent increase in first-half profit.
“By full year, we’ll be able to give you at least one market,” Collymore said, without giving details. “Everyone fixates on Ethiopia, which I think is not helpful. There are other markets that might come up before Ethiopia.”
The M-Pesa service is already available in six other markets outside Kenya including the Democratic Republic of Congo, Ghana and Tanzania, and is used by 34.7 million customers globally, according to Vodafone Group Plc’s latest annual report. Similar rival services are available in more countries across the continent.
The company could take its e-commerce platform known as Masoko, or markets in the local Swahili language, to neighboring Ethiopia, which has Africa’s second-largest population, Collymore said in August.
While the Ethiopian size is a huge draw, a government requirement that Safaricom works with a local bank to roll out M-Pesa will temper uptake, according to Tracy Kivunyu, a senior analyst at Exotix Partners LLP.
“It doesn’t look promising from a regulatory stand-point if it’s a bank-led model because the ability to get customer reach will be hampered, compared to a telco-led model,” she said by phone. “Banking penetration in Ethiopia is quite low, it will lock out a lot of customers.”
A sale of a 35 percent stake in the Nairobi-based company to Johannesburg-listed Vodacom Group Ltd. by parent Vodafone last year freed Safaricom to expand M-Pesa to new sub-Saharan Africa markets.
“There’s no end to African markets that could do with mobile money,” Collymore said.
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