Vodafone scores big from M-Pesa growth
07 November 2013, 09:24
Nairobi - British telecommunications giant, Vodafone, reaped more than KSh 1,3 billion (US2,6 million) following the impressive financial performance by Safaricom during the first half of the year.
The earnings follow the success of the M-pesa money mobile transfer service during the period.
Safaricom is said to have paid Vodafone the money in form of license fee in accordance to the agreement signed between the two companies five years ago when the service was launched.
The local mobile network services provider generated KSh 12,5 billion from the popular M-pesa in the last six months.
This represented a massive 30 percent growth in money generated for Vodafone, considering the British firm earned KSh 1billion during the corresponding period last year.
“M-pesa continues to grow in its significance as a key revenue driver contributing to 18 percent of total revenue,” said Safaricom Chief Executive Officer, Bob Collymore.
He further stated that the company deepened financial inclusion with the introduction of the M-pesa service.
M-pesa facilitates payments by cashless merchants, which also facilitates trade between businesses and their customers.
Vodafone is the largest shareholder in Safaricom.
The company also claims property rights over M-pesa. It is paid quarterly from the earnings of the service.
M-pesa has become the most popular money sending method in the country owing to its convenience and penetration.
Following its success in Kenya, Vodafone has introduced the M-pesa concept to India, South Africa and Tanzania. M. The service is also cheap and accessible compared to bank transactions.
– CAJ News