M-PESA server migration won’t make any difference for the ‘mwananchi’ due to Vodafone ties

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Safaricom’s CEO, Bob Collymore may be having best intentions in mind for Kenyans in new talks with the teleco’s partner Vodafone, to reduce propriety fees which even after server migration that cost the company ksh7.1 billion, the company still has to spend Ksh752 million annually maintenance fee.

Time and again we forget Safaricom has a joint agreement with Vodafone who it owns intellectual property rights with and this is why the company has been quiet on the reduction of M-Pesa transaction fees even amid #KOT buzz following the migration of M-Pesa servers from Germany to Kenya.

It would make a lot of sense to have the tariffs reduced after the migration of the mobile money platform servers mid last month, owing to the fact that the company now has hands on the operations and maintenance meaning lower cost incurred or maybe a better budget on the company’s side.

Mr. Collymore however put it clear that the reduction would not be implemented immediately since the company is now investing on importing data to the new system as well as operating costs, housing and running it.

M-Pesa has proved to be the flagship service for the telco in the year ended march with the product earning 32.6 billion for the service provider which accounted for 15 per cent of total revenue. The revenue is however expected to go up in the next financial year since the platform’s server migration will now allow up to 900 transactions per second from 450 transactions a second.

In an agreement signed by the companies seven years ago before the launch of the mobile money platform, Vodafone is expected to at least earn Sh3.5 billion from M-Pesa in the form of licence fees. The company that also holds 40 per cent stake in the telco has been earning 11 per cent of M-Pesa revenues since 2012.

Ties between the two parties still determine whether or not reduction of propriety fees will be felt by safaricom subscribers using the mobile platform. The two parties are still in communication to determine whether  the fees get reduced or retained in negotiations expected to end July.

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Winfred Kuria
Winfred Kuria is a self-constituted web content writer in charge of Tech News and Events Publicity at Kachwanya.com. She will communicate in the simplest way possible with an aim of changing the world one mind at a time.
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