NAIROBI, Kenya, Mar 10 – Safaricom Chief Executive Officer Bob Collymore has maintained that a split of the mobile service provider and the M-Pesa platform will discourage investors as well as suppress innovative operators.
Speaking to Capital Business on Friday, Collymore hinted the debate to hive off M-Pesa from Safaricom is having a negative impact on the Nairobi Stock exchange.
“If you look at what the impact that proposal has already had on the Nairobi Stock Exchange which is already one of the worst performing stock exchanges in the world this year. It has taken Sh116 billion off the stock exchange.”
He also stated that should the two be separated, the cost of operations would be high on the customers.
“Safaricom represents 40 percent of the stock exchange and so it has certainly moved NSE into the worst performing stock exchanges in the world. Shareholders cannot see the sense in it, customers cannot see the sense in it because in splitting it you will increase the cost of transactions for customers,” he said.
He explained that the M-Pesa platform has been touted as one of the most successful money transfer systems in the country and has pulled Kenyans out of poverty.
“Why would you do that for the world’s most successful money transfer system. A system which the MIT has said has lifted about 184,000 Kenyans out of extreme poverty,” he stated.
The Safaricom CEO further stated that M-Pesa has earned Kenya the premier position in mobile money technology and that should not be interfered with.
“I think the proposal to split the Safaricom and M-Pesa is the most ludicrous thing I have heard in a very long time and it is clearly the most ludicrous thing our shareholders have heard for a long time,” he said.
Information, Communication and Technology Joe Mucheru has already rejected the proposed legislation seeking the split.
Gem MP Jakoyo Midiwo has proposed amendments to the Kenya Information Communication Act (KICA) that will limit telecommunications companies from venturing beyond communication services. The proposal will force telcos to apply for a financial services license to run mobile money entities.
Safaricom is 40 percent owned by UK-based Vodafone which operates M-Pesa while the Kenyan government owns 35 percent and the remaining 25 percent is publicly floated on the Nairobi Stock Exchange.
It is also by far the biggest telecoms firm in Kenya, with 26 million subscribers and dominates the mobile-based financial services sector because of M-Pesa.