Vodacom Group, South Africa’s largest telecom, has ruled out separating its M-Pesa mobile money platform from Safaricom and listing it separately, despite renewed pressure from Kenyan authorities to unbundle the telecom operator’s core businesses.
The company, which holds a 40% stake in Safaricom alongside the Kenyan government, said M-Pesa’s operations were too closely integrated with the telco’s core business to justify a separation.
“What we’re trying to position is we’re not looking to separately list the financial service businesses because we do see it intricately linked to our value proposition that we’re providing to the customer,” Vodacom CEO Mohamed Joosub said during an earnings call on Tuesday. “In fact, we see it more closely linked and then coupling that with loyalty going forward.”
The statement comes amid ongoing discussions in Kenya over whether Safaricom— Kenya’s largest listed company—should be divided into separate units.
Spinning off M-Pesa would give regulators more control over Kenya’s most important mobile money platform. Still, for Safaricom, it could disrupt a business that now brings in nearly half of its revenue and saddle the company with a massive tax bill.
In August, the Treasury Secretary told Bloomberg that the plan to split Safaricom into three separate units—its core telecom business, a tower company, and the mobile money giant M-Pesa—was in motion, a move that could also involve the state selling part of its 35% stake in the company.
Mbadi said a recent assessment found “huge benefit” to the state from such a restructuring, but added that a final decision will need cabinet approval before anything moves forward. The split would also enable the government to revalue Safaricom’s business units and list them separately in the future.
A stalled split
The Treasury and the Central Bank of Kenya (CBK) have argued that such a structure could also strengthen regulatory oversight and consumer protection in a market where mobile money has become a critical financial infrastructure.
Safaricom prefers a group reorganisation that keeps M-Pesa under the same corporate umbrella, arguing that a complete spin-off would only make sense if it adds value for shareholders and customers, not simply to meet regulatory demands.
M-Pesa has grown into the most profitable arm of Safaricom, contributing KES 88.1 billion ($560 million) in revenue for the six months to September, a 14% increase from the same period a year earlier. The business now accounts for 44% of Safaricom’s total revenue of KES 199.9 billion.
“Take a market like Kenya, the market is still growing very, very strongly, but our fintech services is sitting at 44% of revenue,” Joosub said.
While CBK governor Kamau Thugge has pushed for the split to increase the regulatory oversight on the mobile money platform, he has also warned that separating M-Pesa could trigger a tax liability of KES 75 billion ($500 million), complicating any restructuring effort.
