Safaricom Seeks Full Ownership Of M-Pesa’s Intellectual Property
As Safaricom looks to expand M-Pesa services to other countries within the African continent, efforts to acquire the intellectual property rights from Britain’s Vodafone have begun, Safaricom’s CEO, Bob Collymore has said. This is in a quest to take full control of the mobile money’s future that is currently determined by Vodafone.
The move to take ownership of M-Pesa the brand and the intellectual property will involve a 12 million euro (1.3 Billion) deal that will see both purchasers make significant savings in royalties paid to Vodafone.
“We are taking ownership of M-Pesa, the brand, and the intellectual property. Joint ownership between us and Vodacom and we then use that as a platform into running into other markets across the continent,” Collymore said in an interview.
The telco giant pays 2 percent of its annual M Pesa revenue to Vodafone. Vodacom, a South African operator which owns 35 percent of Safaricom pays Vodafone 5 percent in an intellectual property fee from its M Pesa business which in mainly in Tanzania.
Revenue from M-Pesa stood at 75 billion shillings ($741 million) in Safaricom’s financial year to the end of March.”Given that the bulk of the M-Pesa business is in Africa, between Tanzania and Kenya, it is right for us to be determinants.” Said Collymore
According to the CEO who will head the Telco until 2020, full ownership will allow partners to develop local products such as Fuliza easily. The overdraft facility that was launched in January this year has accumulated 8.8 million users who have borrowed 45 billion shillings.
Safaricom is looking to penetrate into the mobile payment, telecoms and the banking sectors in other countries across the region.
In order to acquire the brand and intellectual property rights, regulatory and shareholder approvals will be required both in Kenya and South Africa, leaving it almost in the fate of these authorities. However, Safaricom’s CEO is adamant to close the deal this year.
Vodafone holds a 5% stake in Safaricom