This research report was prepared by the Research Department of Old Mutual Securities Limited. Old Mutual Securities Limited is a securities trading company licensed by the Capital Markets Authority (Kenya) for the purpose of facilitating trade on the Nairobi Securities Exchange.

Here are our views on the news making headlines today for Kenya:
CAK Director - General Francis Wang’ombe on Wednesday said in an interview with NTV that while the authority has previously found Safaricom guilty of abuse of its dominant position in the mobile money market, the firm later agreed to open up its more than 85,000 M-Pesa agents to rivals Airtel and Orange. Mr Wang’ombe’s reaction follows an announcement on Tuesday by the Communications Authority of Kenya (CA) that it has started a process to formulate regulations that will give it powers to automatically declare any firm with more than 50 per cent market share as a dominant player.

Our View: Safaricom has remained the market leader due to their product innovation initiatives. Last year, the company agreed to open over 85,000 M-pesa agents to rivals after the CAK declared it to have abused its dominance position. M-pesa continues to be a success story, especially when the company is keen on expanding its platform capabilities. The company got approval from the Central bank to offer international money transfer services and this has enabled the company to access 10 new markets across the world. Lipa na M-pesa also continues to gain traction as the Company continues to enroll more merchant to the platform for the payment of goods and services across East Africa. Synergy creation has been key in ensuring Safaricom’s success story. The company actively partnered with KCB (Kenya’s biggest bank by asset base) to launch “Biashara@smart” a product aimed at empowering and growing SMEs. The company also plans to introduce bundled internet for homes and on demand TV viewing, a service that is currently dominated by Wananchi Group through its lucrative fixed internet segment (Zuku Triple Play Package).

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