Reasons Why Yu Call For Safaricom to Open up Mpesa to other Networks is brilliant but Safaicom will not go for it

Kennedy Kachwanya
13 years ago
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Ok..Kenyan mobile operator Yu has called on rival Safaricom to open up its mobile money transfer service M-Pesa to other networks. The idea is great and I think if it happens then it will accelerate the growth of mobile money system in Kenya. But the reality is , I don’t think Safaricom will go for it. Safaricom opening Mpesa would definitely help them gain on the Mobile Money side although on the short term basis but might lose out completely to the other Mobile operators on the Mobile Subscribers.

It is possible that if Safaricom lose out on the mobile subscribers , it would also lose out on the Mobile Money side too on the long run. According to Taneja number portability had failed to take off because subscribers do not want to lose their mobile commerce connection.

From there it is clear that Safaricom maintained its dominant market share position in Kenya both on mobile subscriptions and Mobile money mostly because of MPESA. Most people do not like to change their numbers or network because of MPESA . Without Mpesa probably Safaricom would have been overtaken by Aritel in terms of market share by now. In the last two years, Airtel and others have all waged relentless war on Safaricom market share but so far ,not much to show for it.

According to the latest stats by CCK:

Safaricom Subscribers increased by 593, 177 to 17,946,363 from 17,352,186.
Airtel Subscribers increased by 557,567 to 4,172,186 from 3,614,619.
Yu subscribers increased by 46,742 to 1,629,289 from 1,582,947.
Orange saw an increase of 16,686 subscribers to stand at 2,745,702 subscribers from 2,729,016.

As you can see , Safaricom still control over 65% of Mobile market share but when you bring in Mobile Money then the percentage goes up to almost 95%. According to the same report, the stats for the Mobile Money are as follows:

Mobile money subscriptions increased by 5.9% to 18,414,667 from 17,394,727
Money deposits grew 17.5 per cent to 56,704 million Ksh from 48,270 million.

CCK did not indicate whether the other Mobile Money operators are gaining on Safaricom Mpesa but the assumption is, it is all about Mpesa. And after learning that the amount of Safaricom Mpesa transactions in December 2011 was more than the amount of transactions done by Western Union Globally during World Bank Nairobi Data Boot camp, I think you can never question the position Mpesa in Kenya.

Now look at the situation where Safaricom open up Mpesa. It simply means that,it will not matter the mobile operator you are using, you will be able to access the MPESA from any network. Then the next question will be why stay with Safaricom which essentially is an expensive network than the other mobile networks when comes to voice calls and sms. At that point when people realize that they can simply change to Yu or Airtel and still access Mpesa, it will probably mark the beginning of the end of of Safaricom.

Finally there is the question of the MPESA API. This one we have talked about many times and still no answer from Safaricom. The API to the developers does not threaten Safaricom position in the market in any way. Actually, I believe that the action will revolutionize mcommerce in Kenya and beyond . On top of that it could be one great cash cow for Safaricom.

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