Airtel Kenya has completed the process of separating its mobile money business from the telecommunications arm, with the new entity now operating as Airtel Money Kenya Ltd (AMKL).
This was announced Tuesday morning by the Central Bank of Kenya (CBK), which termed the move a milestone for the industry.
"The completion of this restructuring enables AMKL to ring-fence its operations and focus exclusively on its mobile money business. Significantly, this sets the foundation for AMKL to enhance governance over its mobile money business, strengthen its operations, and offer better services to its customers," the financial regulator said in a statement.
"CBK licensed AMKL as a Payment Service Provider (PSP) in line with the National Payment System Act, 2011 on January 21, 2022, and also granted a transition period to complete the transfer," it added.
Airtel Kenya began the process of separating the two arms of its business in 2019, with Safaricom, the largest telco in the region, expected to do the same following CBK's years-long push for “customer-centric policies” in the telecommunications industry.
Safaricom and Airtel are the top telcos by mobile subscriptions.
Photo credit: Nation Media Group
A recent spirited attempt by Parliament to make the split a reality flopped early last year after MPs snubbed debate on the Kenya Information and Communications (Amendment) Bill sponsored by Gem MP Elisha Odhiambo, which had targeted to address concerns that Safaricom has become too big through its dominant market share in voice, mobile data, and mobile money.
But recent intervention by the regulator has not only seen Safaricom change tune, but also the firm has agreed on a path to split the company and ceded to demands to share merchants and agents with rivals.
Safaricom chief executive officer Peter Ndegwa is on record saying that the company is preparing for a split that will see it form a holding company to house connectivity, mobile money, tower, and the Ethiopian businesses as subsidiaries.
It is not just Safaricom and Airtel, Telkom Kenya as well has agreed with the CBK on the separation of its voice and data businesses from mobile money transfer and lending units.
"CBK has engaged PSPs (Payment Service Providers) to ensure that the activities under CBK’s supervision are appropriately ring-fenced from other business lines. This will allow the PSPs to protect their CBK-regulated activities from shocks emanating from the other business activities, strengthen governance, enhance resilience, and focus on improving its services to customers," the regulator said today.
Safaricom controls 41.9 million out of the 68 million mobile money wallets followed by Airtel at 21.5 million and Telkom at 4.6 million.
