Safaricom, the second biggest telecommunication company in Africa, announced its plan to transition into a holding company that will be an umbrella of its other telecoms businesses, the M Pesa mobile money business, and the Ethiopian Unit as its subsidiary.
Speaking on the company’s transition plan, Peter Ndegwa, the Chief Executive Officer (CEO) of Safaricom,
said the company plans to establish a solid group structure, which would allow Safaricom to access diverse businesses.
He said the major reason Safaricom has been successful in its relationship with its consumers over the years
is because mobile money is part of the GSM business, so the rumored claims of splitting M-Pesa from Safaricom
is not happening anytime soon.
He said, “Although we (Safaricom and M-Pesa) work in separate teams – the actual M-Pesa team is very different – however, they rely on the network that the GSM side has to provide. They rely on the distribution network.”
M Pesa mobile money was launched by Safaricom in 2007 as a mobile money payment transfer service with over 51 million M-PESA users.
Safaricom after its transitioning as a holding company plans to accommodate other businesses in the nearest future, including Digi Farm, a new tower company.
African companies transitioning into holding firms seems to be the new normal as it gives them access to diverse businesses, opportunity to expand revenue generation and broaden growth while offering quality service.
MTN, Africa’s biggest mobile phone network provider transitioned into a holding company, MTN Group in march 2021.
MTN has since ventured into a series of businesses from Payment Service Bank (PSB) called MoMo to agent banking and e-commerce.
Since its launch a few months ago, MoMo has garnered over 56 million users, according to the telecommunications giant.
However, there seems to be fierce competition between the two leading telecoms in Africa on which of them has the top mobile money service in Africa.