Airtel Wins Case to Compel Safaricom To Open Up Mpesa Agency Network

Mpesa Agency

Mpesa AgencySafaricom‘s main advantages that led to an edge over rivals in Kenya’s mobile money industry include the vast agency network alongside the 21 million strong subscriber base. This is there no more as Communications Authority of Kenya last week ordered Safaricom to open it up to rivals for business. Airtel had filed a petition to have Safaricom open up it’s exclusive agency network, lower the cost of transactions and allow for interoperability of the platform.

Safaricom has 85,000 Mpesa agents across the country and these are now open for business with rival mobile money operators. Though this is a victory for all mobile money players, Airtel stands to gain the most as the second largest mobile money player in the country should they make good of the leverage.

Mpesa has for the longest time been the market leader in mobile money, the large agency network being quite the push towards reach in every corner of the country and has also been the reason many consumers stick to Safaricom for other services. Safaricom on the other hand has since opened up the Agency network to rivals and still maintains the costs of sending money from Mpesa to the other mobile money networks.

Read below the message from Airtel:

Nairobi, Kenya, July 28, 2014 The Communications Authority of Kenya (CAK) has ordered Safaricom to open up its M-Pesa platform after Airtel Kenya filed a petition, accusing Safaricom of unfair competition. It has also prohibited the mobile operator from levying extra charges on competitors using its network.

This brings to an end a long battle between Airtel and Safaricom over exclusivity of the service, which barred M-Pesa agents from engaging in business with other mobile operators.
In a letter signed by CAK, and sent to Safaricom and Airtel on Friday July 25, CAK ordered Safaricom to effect the directive before July 18.

“All restrictive clauses in the agreements between Safaricom and mobile money transfer (M-Pesa agents) be immediately expunged but in any event not later than July 18, 2014,” the letter states.

Airtel insisted that Safaricom should go public and official on the decision to open up its network.  “Safaricom should make public and official the decision to open up its network,” Airtel CEO Adil El Youssefi said earlier.

CAK in its ruling also declared that Safaricom’s oversight shall be limited to its business with the agents. Each mobile money service provider shall also be responsible for ensuring compliance with the Central Bank of Kenya regulations.

“We did not rule on the interoperability and the cost of transactions because it is an issue that needs the input of both the Central Bank of Kenya and the Communications authority,” CAK director-general Wang’ombe Kariuki said on phone.