yu calls on Safaricom to open up M-PESA service to rivals

1 Feb 2012

Indian-owned mobile phone operator Essar Telecom Kenya, which operates under the ‘yu’ brand name, has called on market leader Safaricom to open up its mobile money transfer service M-PESA to other networks. yu manager Madhur Taneja said that the cellco would be willing to pay royalties to Safaricom, the country’s number one operator by subscribers, for the shared use of M-PESA, and blamed the underwhelming impact of mobile number portability (MNP) on the fact that Safaricom customers are unwilling to risk losing their access to the mobile banking solution, regardless of their network preferences.

According to TeleGeography’s GlobalComms Database, Safaricom introduced M-PESA in February 2007 in conjunction with part-owner Vodafone. The service allows customers without bank accounts to deposit and withdraw cash, transfer money to another person’s account via SMS, and top up their pre-paid airtime. Cash is paid in and withdrawn at specified M-PESA agents, which are typically Safaricom dealerships, but which also include other retail outlets such as supermarkets, shops and petrol stations. In December 2008 then-finance minister John Michuki ordered an audit of the service in an effort to allay concerns about the safety of users’ money. Safaricom’s chief executive Michael Joseph welcomed the audit, saying it would prove that M-PESA is a reliable money transfer service. No irregularities were found, and at the time of writing M-PESA reported in excess of 15 million users.