Safaricom Limited (the biggest telecom company in Kenya by subscribers) has acknowledged that its biggest investor Vodafone will be transferring 35 percent of its stake in Safaricom to Vodacom which is a Vodafone International Holdings B.V. subsidiary in Africa. This means that Vodafone will exchange a 35 percent indirect stake in Safaricom for new ordinary Vodacom shares. Speaking on the matter, Safaricom CEO Bob Collymore said;
“The agreement Vodafone Group has reached with the Government of Kenya will ensure Safaricom continues to have strong Kenyan representation at Board and management levels, and promotes the continued successful expansion of the company as well as the opportunity to drive M-PESA to other markets in the continent.”
The deal would have to be approved by shareholders of the parties involved and government authorities in Kenya and South Africa.
Safaricom still dominates the Kenyan telecom sector with nearly 26 million subscribers thereby giving it a 63 percent share of that market. Airtel comes a distant second with about 21.2 percent share but it’s not just traditional telephony that gives Safaricom an edge and as Mr. Collymore notes, M-PESA (the mobile remittance scheme by Safaricom) is very popular and is being tested in other markets as well. Safaricom dominated the mobile money subscriptions market with by about 67 percent share.