Kenya may split Safaricom into telecom, tower, and M-Pesa units. Government seeks efficiency and potential stake reduction.
Kenya’s government is evaluating a potential split of Safaricom Plc, the nation’s largest listed company, into three distinct units. The plan could also involve reducing the state’s 35% stake in the mobile-phone operator.
Three Units on the Table
Treasury Secretary John Mbadi revealed in Nairobi that the proposed restructuring would create a telecommunications company, a tower operator, and a separate mobile payments platform, M-Pesa. Mbadi described the assessment as showing “a huge benefit” to the government if the company is divided.
Government Stake and Cabinet Approval
While discussions are ongoing, a final decision on splitting Safaricom and reducing the state’s stake has not yet been finalized. Any action would require formal approval by the Cabinet, and the government is weighing both financial and operational advantages.
In neighbouring Uganda, Mtn, the country’s leading telcom company announced plans to spin off its mobile money unit into a standalone fintech firm.
Efficiency and Market Impact
Analysts say the move could streamline Safaricom’s operations and unlock value in the distinct business units. By separating the mobile-money platform from the telecommunications infrastructure, the government hopes to enhance market efficiency and attract further investment.
A Historical Perspective
Safaricom, renowned for pioneering M-Pesa, has been a transformative force in Kenya’s digital economy. The platform has not only expanded financial inclusion but also made Kenya a global leader in mobile payments. The proposed restructuring signals a potential shift in how the company aligns its services and investment priorities.
Investor and Market Reactions
Global and local investors are closely monitoring developments, particularly regarding the impact on share value and the future of M-Pesa. Any reduction of the government’s stake could influence foreign investor confidence while reshaping the competitive landscape of East Africa’s telecom market.
