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Telecoms Kenya Safaricom to host M-Pesa in Kenya by 2015

Safaricom to host M-Pesa in Kenya by 2015

mobilemoneykenya

Kenyan mobile operator Safaricom says it will start hosting its mobile money transfer service M-Pesa in the East African nation by 2015.

The mobile operator says the move seeks to reduce the system’s frequent outages that anger and inconvenience its 15 million users.

Currently, M-Pesa is hosted and managed by British multinational telecommunications company Vodafone Group, the biggest shareholder in Safaricom with a 40% stake.

According to reports last month’s M-Pesa outage caused by a power outage which damaged Vodafone server discs used to help host the mobile money offering, made it impossible for millions of M-Pesa customers to send money, make deposits and withdraw cash.

Hosting M-Pesa in Kenya is expected to reduce outages which often result due to technical hitches like fibre cuts at sea. And it is expected to speed up transactions by limiting information flow between customers and Safaricom in Kenya.

Currently, customers send a message to Safaricom in Kenya, which is then transferred to the Vodafone server in Germany, then back to Safaricom and finally a reply is sent to the customer.

According to Safaricom chief executive Bob Collymore, specifications for the new M-Pesa platforms have been designed and the tendering process has started.

“The new platform will be ready for use in two years, after which we expect to have less stoppages and faster transactions. We are yet to award the contract but the tendering process is underway. More information on this development will be released in due course,” he told the Daily Nation newspaper.

Safariom plans to assume ownership and management of the new M-Pesa platform although the firm will continue paying royalties to Vodafone for using its intellectual property.

The British telco currently collects up to 25 % on M-Pesa revenues in royalties.

Safaricom is Kenya’s biggest network operator with 19.1 million subscribers, a market share of over 65% in the country's mobile market.

And the M-Pesa service is its second biggest revenue stream after voice, contributing about 37% of the firms total revenues, according to half year results for the period ended 30 September 2012.

In the six months under review, Safaricom said it increased its number of M-PESA agents by 6,000 to close at 45,540 agents nationwide.