Regulators Close In on Safaricom’s Ownership Structure
Control is being renegotiated around Safaricom, and the regulator has decided it cannot stay on the sidelines.
The Vodafone Safaricom merger is now formally under review by the East African Community Competition Authority, and the scrutiny reflects more than procedural caution. The proposed acquisition of a 15% Safaricom stake from the Government of Kenya concentrates ownership in a company that already defines the country’s communications and payments backbone.
The Authority’s inquiry, opened on January 22, positions the transaction as a question of market structure rather than corporate housekeeping.
Written submissions are due by February 16, and they are being sought from competitors, suppliers, and customers who operate within Safaricom’s orbit whether by choice or necessity.
What sits beneath the review is a basic issue. How much control is too much in a market where scale itself acts as a barrier.
Control by design, not by surprise
The arithmetic of the deal is straightforward. Vodafone Kenya would acquire 15% of Safaricom currently held by the state. Group restructuring would leave Vodacom with effective control of 55%. The government would retain 20%, while public investors would hold 25%.
Those figures place decisive influence firmly within one corporate group. Board control follows. Strategic direction follows. The ability to set internal priorities without prolonged negotiation follows as well.
Safaricom would remain listed on the Nairobi Securities Exchange, but listing status does not dilute control when voting power is already settled. Minority shareholders retain liquidity and visibility, not leverage.
M-Pesa as infrastructure, not an add-on
Any review that treats Safaricom as a conventional telecom misses the point. M-Pesa is not a side business. It is embedded infrastructure. Payments, credit, payroll, government transfers, retail settlement. These flows pass through a platform used daily by tens of millions of Kenyans.
Vodacom’s presence across markets such as Tanzania and the Democratic Republic of Congo brings experience at scale. It also raises the question regulators are now required to ask. Does deeper group control narrow the range of commercial choices inside Kenya’s most dominant digital system.
Competition law is less concerned with declared intentions than with incentives. When control consolidates, incentives simplify. Pricing pressure softens. Platform access becomes conditional. New entrants face friction that does not need to be announced to be effective.
The state steps back, the regulator steps forward
For the Government of Kenya, the sale is framed as a capital mobilisation strategy. Proceeds from the 15% stake could be directed toward infrastructure and digital projects, while a 20% holding preserves state presence.
The consequence is a change in posture. Influence moves away from the shareholder register and into the regulatory file. The Authority’s inquiry reflects that transition. Oversight replaces ownership as the primary tool.
This shift is not abstract. Once the state relinquishes part of its stake, the discipline imposed by competition law becomes more consequential than any internal alignment. The review process is where that discipline is tested.
Submissions that speak by omission
Inviting representations from the market is a way of mapping constraint. Competitors are being asked to describe access. Suppliers are being asked to describe bargaining conditions. Large customers are being asked to describe dependency.
Most responses will be measured. Few will accuse directly. The Authority will read patterns rather than complaints. Similar phrasing. Repeated hesitations. Common limits described from different angles.
Market power rarely announces itself. It shows up in what participants stop attempting.
The narrow range of outcomes
Once submissions close, the Authority can approve the merger, approve it with conditions, or block it. Each path carries consequences.
Approval without conditions would signal tolerance for further concentration in markets already defined by dominance. Conditional approval would attempt to manage behavior rather than ownership, often through undertakings on access or pricing. A block would disrupt fiscal planning and corporate strategy, and would likely be contested.
Conditions, if imposed, will determine whether oversight has practical weight or remains largely symbolic. Technical clauses can either constrain future conduct or simply formalize existing practice.
A company unchanged in name, altered in scope
Safaricom’s management has said operations will continue as normal and that no full takeover is planned. That position aligns with the ownership structure. Control does not require total acquisition when voting power already sits above 50%.
The question before regulators is not continuity of service. It is whether the merger compresses the future. Ownership decisions made now shape which business models, competitors, and partnerships remain viable over the next 5 years.
The Vodafone Safaricom merger places that question squarely in the open. The Authority’s decision will define not just this transaction, but the limits of consolidation in Kenya’s digital economy.
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