Efforts to split Safaricom’s M-Pesa from the telecommunication business gained a new push after a Bill seeking to force telcos to separate their telecommunication business from their other businesses went through first reading on Wednesday.

If the Kenya Information and Communications (Amendment) Bill 2022 is approved by Parliament, all telcos will be required to have separate accounts and produce different reports for all their businesses.  Currently, Safaricom produces one financial report capturing the performance of both M-Pesa and the telecommunication business.

The amendment Bill says that a person licensed to carry out telecommunications business may engage in any other business provided that they obtain relevant licenses from respective regulators of any industry or sector ventured into.

They also need to split or separate the telecommunications business from such other businesses and provide separate accounts and reports in respect of all businesses carried out. Failure to adhere to these conditions will attract a fine of Sh10 million or imprisonment for a term not exceeding two years or both.  Once the Bill is enacted into law, telecommunication companies will have six months to comply.

Mobile money

This latest move by Parliament follows similar efforts by Central Bank of Kenya (CBK) last year.  In October last year, CBK held talks with telecommunication companies with a view to separating mobile money activities from other businesses to enhance governance and minimize shocks on bank-related transactions. It said it engaged payment service providers to ensure that   all activities under its supervision are appropriately ring-fenced from other business lines.

The push by the banking regulator last year came after Airtel Networks Kenya separated its mobile money business from the telecommunications business transferring the mobile money business to a new entity, Airtel Money.