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Safaricom, Vodacom to buy back M-Pesa rights from Vodafone



images 79 - Safaricom, Vodacom to buy back M-Pesa rights from Vodafone
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Kenya operator Safaricom will start a joint venture with sister company Vodacom to acquire the intellectual property rights to the popular M-Pesa mobile financial services platform from their parent company Vodafone, Reuters reported citing Safaricom’s CEO. The EUR 12 million deal will let both purchasers make significant savings in royalties paid to Vodafone and expand the service to new African markets, said Bob Collymore, Safaricom’s CEO.  

Collymore said they are taking ownership of M-Pesa, the brand and the intellectual property. Safaricom pays 2 percent of its annual M-Pesa revenue to Vodafone. Revenue from M-Pesa stood at KES 75 billion in Safaricom’s financial year to the end of March. Vodacom, a South African operator which owns 35 percent of Safaricom, pays 5 percent in an intellectual property fee to Vodafone from its M-Pesa business, which is mainly in Tanzania.  

The acquisition of the intellectual property rights by the new joint venture will allow the partners to more easily develop local products, Collymore said, pointing to Fuliza, an M-Pesa overdraft facility launched in Kenya in January.

Fuliza, which is operated jointly with two local banks, has garnered 8.8 million users who have borrowed a combined KES 45 billion, Safaricom said earlier this month. Apart from developing new products based on the M-Pesa platform, Safaricom and Vodacom also want to launch into other African markets. Collymore cited Ethiopia, where economic liberalization plans put in place by a new prime minister in 2018 have left firms scrambling to position themselves for entry. 

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