Vodacom Might Sell Part Of Its Stake In M-Pesa

As M-Pesa continues to spread its wings within and without Kenya, Vodacom Group is considering selling part of its stake in the giant mobile money platform to unlock value running into billions of shillings as it seeks to strengthen its business.

In a story carried on Business Daily, Chief executive Shameel Joosub disclosed the sale plans at an investor briefing on Tuesday, a move that is likely to shift the M-Pesa space that has positioned itself central in money transfer in the region.

“We would like the market to give us more credit for our financial services assets and we are not in a position yet where we think the time is optimal to sell or even monetize a portion of the assets because we believe there is still a lot of growth left in M-Pesa,” Mr. Joosub said.

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M-Pesa is offered by Vodacom majority-owned subsidiaries in Tanzania, Mozambique, Lesotho, and the Democratic Republic of the Congo (DRC). Vodacom also owns an indirect stake in M-Pesa’s business in Kenya through its 35 percent stake in Safaricom.

In Kenya, M-Pesa has been a key revenue earner for the giant telecommunications company, Safaricom. In 2020, Total M-PESA transaction value grew 58.2 percent YoY to 22.04 trillion shillings while the volume of transactions grew 29.8 percent YoY to 11.68 billion shillings.

The business added 3.4Mn one month active M-PESA customers up 13.6 percent YoY to 28.31 million shillings in FY21 and M-PESA now accounts for 33.0 percent of service revenue.

Mobile data grew 11.5 percent YoY sustaining the double-digit growth trend from the prior year. This was largely driven by sustained momentum in customer growth and usage.

Distinct data bundle customers grew 12.4 percent YoY to 16.71 Mn while one month active chargeable mobile data customers grew 2.1% YoY to 20.04 million.

The effective rate per MB has continued to decline as we drive affordability, declining 21.9 percent YoY. Usage per data subscriber grew 32.7% supporting an ARPU growth of 3.7 percent YoY.

4G Active 4G devices grew 39.8% YoY to 8.5Mn while data customers using more than 1GB in our network grew 31.1% YoY to 6.1 million.