Telkom to part ways with mobile money arm after delayed wink


Telkom to part ways with mobile money arm after delayed wink

Mugo Kibati, CEO of Telkom Kenya. PICTURES | SILA KIPLAGAT | NMG

Telkom Kenya cited delays in obtaining approvals from the Communications Authority of Kenya (CA) for the streaking formation of two subsidiaries announced last year.

Telkom in May 2021 announced that it was reorganizing its corporate structure to create two wholly owned subsidiaries – Telkom Digital and T-Kash – for its financial services business which had started in August 2020.

The T-Kash subsidiary will host its mobile money services and announced the lending app to compete with KCB M-Pesa and M-Shwari, which rival Safaricom operates.

The digital subsidiary is expected to involve infrastructure comprising a fiber network, international submarine cables and a smart landing hub to act as a gateway to the East African region amid increased demand for telecommunications services. data.

Telkom Kenya Managing Director Mugo Kibati, however, said the formation had lagged behind CA’s approval. CA did not respond to the business daily queries by press time since Thursday.

“We’ve done most of this, we’re awaiting regulator approval. Once the regulator approves it, it’s done. It’s all done,’ Kibati said business daily.

Mugo’s intention to form the subsidiaries thwarts Safaricom, which has remained opposed to splitting off its telecommunications business from the mobile money transfer and lending units.

The telecommunications giant says it wants to keep its business lines linked and leverage data analytics to boost revenue rather than break up the business, against Parliament’s desire to dilute its dominant market position.

Telkom expands its 4G network with the addition of 2,000 network sites to bolster its data coverage amid growing mobile internet demand.

The company is investing 11.7 billion shillings ($100 million) in the expansion plan which will be undertaken in partnership with telecommunications companies – Sweden-based infrastructure provider Ericsson and Sweden-based systems integrator South Africa NEC XON.

The investment is expected to increase the company’s internet speed service and propel the company’s ability to capture a greater share of internet business amid growing competition for mobile data subscriptions in the market.

The telecommunications company in partnership with Pakistan and East Africa Connecting Europe (Peace) in March this year also launched the sixth undersea internet cable to deliver higher speeds, lower latency and wider bandwidth.

The 46 billion shilling cable connects Africa to France and Pakistan via the Europe-Asia route, providing direct connectivity to Asia, which is expected to reduce communication delays between Africa and Asia.

The company is also set to advance its mobile money services platform, T-Kash, to take over the dominant M-Pesa.

T-Kash plans to launch a mobile loan service, giving Telkom Kenya customers instant access to microcredit via their mobile phone.

It is in the process of integrating its mobile money service, T-Kash Systems, with local commercial banks to allow customers to send and withdraw money from their accounts.

The consumer service delivery unit will remain within Telkom. Telkom said there will be no job losses as a result of the exercise.

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