The proposed acquisition of a controlling stake in Safaricom PLC by Vodacom Group has ignited a wave of scrutiny from regional competition bodies, with East African Community Competition Authority (EACCA) and the COMESA Competition and Consumer Commission (CCCC) launching formal investigations into the deal. The inquiry centers around the potential for the transaction to stifle competition and raise concerns within the broader East African market and the Common Market for Eastern and Southern Africa (COMESA).
This major deal, which would see Vodacom’s subsidiary Vodafone Kenya Limited acquire an additional 15% stake in Safaricom, would effectively increase Vodacom’s control over the telecommunications giant. As the largest mobile telecommunications company in Kenya, Safaricom has a pivotal role not only in traditional telecommunications services but also in mobile money, where its platform, M-Pesa, is a leader across the region.
The Deal in Focus: A Shift Toward Majority Control
The proposed transaction involves Vodafone Kenya Limited, a subsidiary of Vodacom, acquiring a 15% stake in Safaricom. Following this acquisition and an internal restructuring within Vodafone International Holdings B.V., Vodacom’s stake in Safaricom would rise from 40% to approximately 55%, effectively giving the South African telecom giant majority control over the company.
The deal would see the Kenyan Government, currently a major stakeholder, retain a 19.99% shareholding in Safaricom post-transaction. While this would still make the government a minority shareholder, the strategic consolidation of control under Vodacom has raised concerns among regulatory bodies in the region, prompting investigations to assess its impact on market competition and consumer welfare.
EAC and COMESA Scrutiny: Assessing Competition Risks
The EACCA and CCCC have both initiated formal reviews to determine whether the proposed shift in control would result in any substantial lessening of competition or raise concerns regarding public interest. These investigations are particularly focused on how the deal could affect the highly competitive mobile telecommunications and mobile money sectors across the East African Community and the COMESA region.
As a key player in mobile money services, Safaricom’s dominance in Kenya—particularly through its M-Pesa platform—has given rise to concerns that Vodacom’s increased stake could result in further entrenchment of market dominance. M-Pesa is not just a leading mobile payment platform in Kenya; it has also expanded into Ethiopia, where Safaricom has begun operations. The growing influence of Vodacom, with its expanding control over Safaricom, could make it more difficult for other competitors to challenge this dominance, especially in the mobile financial services sector.
In addition to mobile money, Safaricom’s reach extends into broadband and traditional mobile telecommunications, areas where market concentration could result in higher prices and reduced options for consumers. As a result, the EACCA and CCCC are evaluating whether the proposed deal could ultimately harm competition within these markets.
Public Interest Concerns: The Impact on East Africa and COMESA
Beyond the technical aspects of market dominance, the deal is also being scrutinized for its broader impact on public interest. The regulatory bodies are assessing whether this shift in control could undermine regional economic interests by limiting competition and curbing innovation in key industries, such as telecommunications and mobile finance.
Both the EAC and COMESA are concerned with ensuring that their respective markets remain competitive and accessible to all players, not just dominant multinational firms. These regions have worked for years to improve trade, investment, and market access, and any move that could reduce competition or increase the market power of one company would likely slow the growth of the digital economy in East Africa.
Safaricom’s Market Position and Future Outlook
Safaricom has long been Kenya’s most profitable company, with its influence stretching far beyond telecommunications. The company has played an instrumental role in Kenya’s digital transformation, offering services ranging from mobile broadband to mobile financial services. The M-Pesa platform, in particular, has become a global example of successful mobile money adoption, transforming millions of lives by providing access to financial services in an otherwise cash-dominated society.
Given Safaricom’s market share—with over 40 million customers in Kenya alone—the move to increase Vodacom’s control could significantly alter the competitive dynamics within the country’s telecom industry. While Vodacom has promised that the deal will create efficiencies and better services, critics argue that increasing the company’s market power might harm smaller competitors, potentially stifling innovation and consumer choice.
The Responses from Safaricom and Vodacom
In response to concerns from regulators, both Safaricom and Vodacom have maintained that the proposed deal will not harm competition. Vodacom, the South African telecom giant, has emphasized that the acquisition is designed to further strengthen the partnership between the two companies, which has been in place for several years. The companies have argued that the deal will enable them to provide better, more affordable services to consumers across East Africa by leveraging their combined resources and expertise.
However, the regional regulatory authorities are not convinced by these assurances and have pressed ahead with their investigations. As both organizations work to assess the long-term effects of the transaction, they have invited stakeholders—including competitors, suppliers, and customers—to submit their views. The feedback gathered will play a critical role in shaping the final decision.
A Multi-Billion Dollar Opportunity with Potential Risks
The deal between Safaricom and Vodacom is set to reshape the telecommunications landscape in Kenya and potentially East Africa. The combined assets of both companies would create one of the largest telecommunications giants in the region, with a massive influence on mobile telecommunications and mobile money markets. The value of the deal is estimated at several billion dollars, with Vodacom’s increased stake making it the de facto leader in the sector.
However, this dominance also carries potential risks. Regulatory scrutiny is a necessary step to ensure that the deal does not result in monopolistic behavior, restrict access for smaller players, or drive up costs for consumers. The final ruling on the deal is expected to be a pivotal moment for the region, and it could set the tone for future acquisitions and mergers in East Africa’s telecommunications and technology sectors.
The Regulatory Timeline: What’s Next?
Both the EAC and COMESA have set deadlines for the submission of stakeholder feedback. COMESA has set a submission deadline of February 13, 2026, while the EAC has a slightly later deadline of February 16, 2026. After the submission periods close, regulators will review the feedback and determine whether the deal will proceed as planned or require modifications.
While the final decision is still pending, the deal’s potential to reshape East Africa’s telecommunications market is already creating ripples in the industry. For now, stakeholders in the region eagerly await the outcome of this high-stakes regulatory review.
