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Africa News: Kenya’s Safaricom Talks to (AMZN) on Mobile Payments

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Safaricom Plc of Kenya is holding talks with Inc. about the use of mobile-money service M-Pesa on the e-commerce giant’s platform, part of efforts to expand global reach and bounce back from a first profit decline in a decade.

M-Pesa accounts for about a third of Safaricom’s revenue, and East Africa’s largest company sees the financial-technology product as key to future growth. The carrier already has partnerships with a unit of China’s Alibaba Group Holdings Ltd. and Paypal Holdings Inc.

Safaricom and Amazon already work together on web services while the Nairobi-based company runs local cloud sales for the U.S. giant, Chief Executive Officer Peter Ndegwa said in response to questions on the latest talks, which were announced alongside full-year earnings Thursday. “It is an important partnership as we go into new areas such as cloud,” he said.

Safaricom is by far the largest telecom operator in Kenya and the wider region, with Johannesburg-based Vodacom Group Ltd. owning a minority stake. The jewel in its crown is M-Pesa, which takes advantage of widespread use of smartphones to fill the gap left by a lack of traditional banking.

Sales from the service declined in the year through March, after Kenya’s central bank asked Safaricom to forgo some charges for nine months to discourage cash payments during the Covid-19 pandemic. That contributed to the carrier’s first decline in annual profit since 2011.

Net income dipped 6.8% to 68.7 billion shillings ($642 million) in the 12 months through March.

Subdued Outlook

The ongoing coronavirus crisis may continue to have an impact on consumer spending and disposable income, the company said. Still, earnings before interest and taxes are expected to be in the range of 105 billion shillings and 108 billion shillings, up from 96.1 billion shillings in the year just past.

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