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Google starts taking payments for apps via Kenya’s M-Pesa service

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NAIROBI (Reuters) – Google Play apps and games store has started accepting payments in Kenya through Safaricom’s mobile phone M-Pesa service to boost downloads in a market where many people do not have a credit card.

M-Pesa, which enables customers to transfer money and pay bills via mobile phone, has 27.8 million users in the nation of 45 million people where Google’s Android platform dominates. M-Pesa has been mimicked across Africa and in other markets.

“This is very important to the developer ecosystem in markets where credit card penetration is low,” said Mahir Sain, head of Africa Android partnerships at Google, which is owned by Alphabet Inc.

Safaricom has 13 million smart phones on its network, most of them using the Android platform. It partnered with London-based global payments platform provider, DOCOMO Digital, to enable users pay through M-Pesa, both firms said on Thursday.

Safariom started M-Pesa in 2007, offering money transfer services between users. It has grown to allow users to make payments for goods and services through thousands of merchants.

It also allows users to save, borrow and buy insurance, through partnerships with commercial banks.

 

(Reporting by Duncan Miriri; Editing by Edmund Blair)

 

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Kenya’s Safaricom to launch local rival to Uber

Comments (0) Africa, Business, Latest Updates from Reuters

NAIROBI (Reuters) – Kenya’s biggest telecoms company Safaricom is joining up with a local software firm to launch a ride-hailing company to take on Uber [UBER.UL] as it seeks new sources of revenue, its chief executive said.

Safaricom, which is 40 percent owned by Britain’s Vodafone, and Nairobi-based software developer Craft Silicon will launch the app called Littlecabs in the next three weeks, Safaricom CEO Bob Collymore told Reuters in an interview.

“It is effectively a rival for Uber,” he said. “It is a local competitor which will be cheaper and better for the local community.”

Uber operates in several African countries, including Kenya where it launched in early 2015, drawing customers by offering lower prices and cutting out haggling over fares. But regular taxi drivers have complained about its impact on business.

In March, the Kenyan authorities charged six men with attempted murder and malicious damage to property over an attack on an Uber taxi driver in February. [nL5N1713UX]

Safaricom will help develop the application, offer the network connectivity, put Wi-Fi in vehicles that will be signed up on Littlecabs, and use its mobile-phone based financial service M-Pesa to process payments, Collymore said.

Safaricom remains focused on its core businesses of offering calls, texts, Internet access and M-pesa but Collymore said it was seeking new sources of revenue.

“The direction of the company is to become a platform,” he said, citing partnerships with local banks that use M-pesa to lend money on mobile phones.

Safaricom has had a three-year partnership with M-Kopa, a company that connects customers to solar electricity, and is about to invest in a firm involved in education and another that helps jobseekers, Collymore said.

“When M-Pesa was launched it wasn’t launched as a big thing. It was just launched as a thing that was right in the edge. Now it is 20 percent of (Safaricom’s) revenue,” he said.

Littlecabs is unlikely to grow to that level but would offer a new revenue source and develop skills in the local community, he said.

Safaricom expects its earnings to rise in the financial year to next March on the back of increased data usage driven by the youth segment and higher sales of smart phones. [nL5N188101]

Revenue from calls rose 4 percent in the financial year ending March 2016, bucking the trend in other markets where voice revenues are falling.

Collymore said political protests, which have led to clashes between demonstrators and police, could dampen the outlook.

“It is not a question of who is right and who is wrong; these pictures are not helpful for investments,” he said.

 

(By Duncan Miriri. Editing by Edmund Blair and Susan Fenton)

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Safaricom bags lion’s share of Kenyan mobile revenues

Comments (0) Africa, Business, Latest Updates from Reuters

NAIROBI (Reuters) – Safaricom dominates the Kenyan mobile market, sweeping up more than 90 percent of revenues in areas such as voice calls and text messaging, according to regulator data that could further fuel a debate about competition in the industry.

Rivals like Bharti Airtel and some officials have complained that Safaricom’s dominance stifles competition. France’s Orange is seeking to sell its Kenya operation, becoming the second international operator to quit the country after India’s Essar Telecoms sold its Yu business last year.

The data obtained by Reuters comes as the East African nation is amending the telecom sector’s competition law to give the regulator more powers to penalise companies deemed to be abusing dominant positions in the industry, though what would constitute such abuse is as yet unclear.

Safaricom, in which Britain’s Vodafone has a 40-percent stake, has dismissed accusations it hampers competition, saying it does not abuse its dominance.

Safaricom’s revenues from calls amounted to a 91.63 percent market share in 2014, while its closest competitor, Airtel, had 8.33 percent, according to the data obtained from the Communications Authority of Kenya (CAK).

In text or short messaging services, Safaricom had more than a 90-percent share of total market revenues from that segment, the regulator said.

In mobile data, or internet services, Safaricom’s revenues were 85.50 percent of the market share in 2014, while Airtel had 14.43 percent, Orange had 0.01 percent and Equitel, operated by Equity Bank’s subsidiary Finserve, 0.06 percent.

The figures for Orange are for 2013 as it had not submitted audited accounts for 2014 to the regulator, CAK said.

The regulator usually issues quarterly figures for number of subscribers, which give Safaricom a 67 percent share of Kenya’s 35 million users in June. It also gives traffic volumes for areas such as calls.

Asked about the regulator’s revenue breakdown, Safaricom Chief Executive Bob Collymore told Reuters: “We don’t recognise that data.” He said subscriber numbers and network traffic were a better gauge of how the firm was performing.

 

M-PESA

The data did not detail revenue from phone financial services, where Safaricom’s M-Pesa service is the most popular offering, allowing users to pay bills or send money even using the most simple mobile phone device.

Analysts say this service draws customers to use Safaricom’s wider telecoms services over its rivals.

Eric Musau, analyst at Standard Investment Bank, said the dominance of a single operator was hurting competition by driving out rivals like Essar and Orange.

He said, however, that some smaller operators were failing due to inadequate capital, frequent shareholding changes and a lack of a sound strategy for the local market. “I would say one player had a better strategy than the rest,” he added.

CAK said in August that it was amending the telecom sector’s competition law, but said it was not targeting Safaricom or any other company. It did not aim to penalise any company just for being dominant, but only if there was abuse of its position in the market.

The regulator’s head, Francis Wangusi, said at the time the new regulations would break down the telecoms sectors into segments including mobile and fixed voice, data, text messaging and mobile money transfer services.

“It is too early for us to come up to say ‘Safaricom you are dominant’, because Safaricom can be dominant in certain markets, but not dominant in others,” he said. “In all these markets, we would not apply the same rules,” he added.

Safaricom has opposed the proposed changes saying they could deter investments by targeting large firms.

Airtel Kenya CEO Adil El Youseffi said the current market situation was limiting innovation and consumer choice and driving operators out of the country. “The sector is unable to attract new or incremental investments from other international players,” he told Reuters.

Orange Kenya gave no specific comment on the figures.

(By Duncan Miriri, Reuters)

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