CompanyGraph
Vodafone Group Plc
VOD · United Kingdom
Runs M-Pesa mobile payments in Kenya through a banking licence and operates mobile networks across 15 countries.
Vodafone runs two distinct businesses inside one corporate structure: through Safaricom, it holds a Central Bank of Kenya e-money licence that connects M-Pesa directly to Kenya's interbank payment rails, and separately it operates GSM and 5G mobile networks across 15 countries under fragmented national spectrum allocations. The M-Pesa revenue — every peer-to-peer transfer commission and every merchant settlement — flows from that CBK authorisation rather than from the mobile network underneath it, because the licence is what allows each M-Pesa agent to hold cash float and settle transactions inside the Kenyan banking system rather than around it. No pure telecommunications competitor can replicate that position without obtaining a separate banking authorisation from the Central Bank of Kenya, which capital alone cannot buy, but if the CBK ever revokes or restructures the licence, the agent network loses its settlement function and the revenue stream collapses at the point of the authorisation. The European network business faces a different kind of ceiling: because spectrum is allocated by separate national regulators — Ofcom in the UK, BNetzA in Germany, and their equivalents elsewhere — no single pan-European network architecture is possible, and how fast Vodafone can expand or upgrade in any market is set by each regulator's own timetable, not by how much the company is prepared to spend.
How does this company make money?
Most customers pay a monthly fee for a voice and data plan, billed in the local currency of each country. When subscribers travel abroad and use their phones outside their home network, roaming charges are settled between the networks through clearing houses. In Kenya, M-Pesa earns a commission on every peer-to-peer transfer and every merchant payment processed through Safaricom. Large companies that need connected communications across multiple countries pay Vodafone Global Enterprise under long-term contracts covering several operating territories at once.
What makes this company hard to replace?
Enterprise customers on Vodafone Global Enterprise are tied in through contracts that cover up to 15 different countries, each with its own local telecom rules — renegotiating all of those at once with a new provider is a significant undertaking. M-Pesa users in Kenya would lose access to money stored in their mobile wallets during any move to a different platform, which makes switching immediately costly. International roaming agreements are built through bilateral negotiations between networks and cannot simply be handed over to a different provider.
What limits this company?
M-Pesa agents must hold physical cash to pay out when a user wants to withdraw money. The total number of transactions that can happen at any moment is capped by how much cash is sitting in agent tills across Kenya — not by the speed of the software or the mobile network. When agents run low on cash, withdrawals slow down, regardless of how many people want to use the service.
What does this company depend on?
The Central Bank of Kenya, whose e-money licence is the foundation of M-Pesa operations. National regulators including Ofcom in the UK and BNetzA in Germany, who assign the spectrum that each mobile network runs on. Ericsson and Nokia, whose base station equipment physically builds each network. Fiber backhaul providers in every operating market, who carry traffic from cell towers to the wider internet. Bilateral roaming partners, whose agreements let Vodafone customers keep phone service when they travel abroad.
Who depends on this company?
M-Pesa agents across Kenya who earn commission on every mobile money transaction — if M-Pesa stopped, that income disappears. Multinational companies using Vodafone Global Enterprise for communications between offices in Europe and Africa — their connections across those countries would break apart. Roaming partner networks whose own customers rely on Vodafone coverage when travelling in Vodafone markets — those travellers would lose service.
How does this company scale?
The software that manages billing and network operations can be rolled out to a new market without much extra cost — that part scales easily. What cannot be accelerated is getting spectrum. Every new country or network upgrade requires a separate licence from a separate national regulator on that regulator's own timetable. Spending more money does not speed that process up, so growth timelines are set by regulatory calendars, not by how much the company is willing to invest.
What external forces can significantly affect this company?
European Union rules that abolished roaming charges between EU countries have removed a significant source of revenue from cross-border mobile traffic. Currency devaluations in markets like Turkey and Ghana mean that even when local revenues hold steady, they convert to fewer British pounds. Brexit created two separate data protection regimes — one for the UK and one for the EU — meaning Vodafone must run different compliance processes for its UK and European network operations.
Where is this company structurally vulnerable?
If the Central Bank of Kenya revokes or restructures the e-money licence held through Safaricom — because of a policy change, a new framework for non-bank payment operators, or instability in the Kenyan banking system — M-Pesa loses its connection to the payment rails instantly. The agent network stops being able to settle transactions, and every commission that M-Pesa earns disappears, regardless of how many subscribers are still using their phones.