NAIROBI (Reuters) – the kenyan Safaricom to start a joint venture with Vodacom to acquire the intellectual property rights of the popular M-Pesa mobile financial services platform of the british Vodafone, Safaricom’s CEO said on Thursday.
The 12 million euro ($13.4 million) deal will let both buyers significant savings in the royalties paid to Vodafone and expand the service to new markets in Africa, said Bob Collymore, Safaricom’s CEO.
“We are the owner of M-Pesa, the brand and the intellectual property. Common property of us and Vodacom and then we use that as a platform in other markets around the continent,” Collymore told Reuters in an interview.
Safaricom, the most profitable company in Eastern Africa, pays 2 percent of the annual M-Pesa revenue of Vodafone. The revenue from M-Pesa stood at 75 billion euros ($741 million) in Safaricom in the year to the end of March.
Vodacom, a South African operator, which owns 35 percent of Safaricom, to pay 5 percent in any of the intellectual property fee to Vodafone M-Pesa-industry, mainly in Tanzania.
“More important than the significant savings, it is about us determining the future, the roadmap of M-Pesa, because at the time the plan is adopted by Vodafone,” Collymore said.
“Given the fact that the largest part of the M-Pesa business is in Africa, between Tanzania and Kenya, it is good for us to be determinants.”
The acquisition of the rights of intellectual property owned by the new joint venture, the partners more easily develop local products, Collymore said, pointing to Fuliza, an M-Pesa-current facility launched in Kenya in January.
Fuliza, which is operated together with two local banks, garnered 8.8 million users that have borrowed a combined 45 billion shillings, Safaricom said earlier this month.
Besides the development of new products based on the M-Pesa platform Safaricom and Vodacom also want to start in other African markets.
Collymore cited Ethiopia, where the economic liberalisation of the plans in place to by a new prime minister last year have left companies scrambling to position themselves for the access.
“We are watching Ethiopia closely, because if we see that the liberalisation of the markets, both the mobile payments market, the market for telecommunications and the banking sector, we think there are opportunities,” he said.
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Vodafone has a 5% stake in Safaricom.
Safaricom is planning to form a joint venture with Vodacom, and the acquisition of the intellectual property rights of M-Pesa still requires regulatory and shareholder approvals in South Africa. It also requires approval in Kenya, Collymore said.
“We put everything in its place, just subject to obtaining the appropriate approvals,” he said, adding the joint venture should be set, and the deal with Vodafone was completed this year.
Edited by Mark Potter