KENYAN GOVT CONSIDERS SPLITTING SAFARICOM INTO THREE SEPARATE UNITS

Kenya’s government is weighing a plan to break up Safaricom Plc, the country’s largest telecommunications company, into three distinct businesses.

Treasury Cabinet Secretary John Mbadi said a government review showed “huge benefits” could be realised by splitting the firm into a telecommunications provider, a tower operator, and an M-Pesa mobile money company. The state owns a 35% stake in Safaricom.

Mbadi also disclosed that the Treasury is close to settling a KSh 75 billion tax dispute with the company.

Safaricom has faced pressure from regulators and lawmakers for years to separate its mobile money service from its telecom business. Critics argue the company’s dominance in voice, data, and mobile money has left rivals Airtel and Telkom Kenya at a disadvantage.

A previous push in Parliament to enforce a split collapsed in 2021, when MPs declined to debate amendments to the Kenya Information and Communications Act. Lawmakers revived the effort in 2024, citing competition and oversight concerns.

Unlike Airtel Kenya, which formally separated its mobile money business in 2022, Safaricom has resisted the idea. Chief Executive Peter Ndegwa has repeatedly ruled out spinning off M-Pesa, insisting that the platform’s integration with Safaricom’s core business gives it a strategic edge.

Ndegwa has said Safaricom plans to form a holding company structure in 2025, with M-Pesa, data, voice, and messaging divisions operating as subsidiaries. M-Pesa, which contributes nearly half of Safaricom’s revenue, will remain under the group.

The Central Bank of Kenya regulates M-Pesa, while the Communications Authority oversees Safaricom’s voice and data services. Both regulators have supported proposals for a split to strengthen oversight.

Safaricom, however, has dismissed claims that separation would benefit customers or shareholders, noting that peers like MTN and Airtel Africa have yet to see major valuation gains from similar restructures.