Safaricom has opened up its M-Pesa agents' network to rivals as the telco announced its plan to allow a seamless mobile money transfer system with other operators.
According to Business Daily, the move is a big win for Airtel that has been pushing for integration of mobile money services at the distribution and technological level to encourage competition.
It means investors can now run M-Pesa services alongside those of the telco's rivals such as Airtel Money and Orange Money (from Telkom Kenya) in the same premises.
The agents stand to earn more in commissions from the end of the restrictions that had seen Safaricom build a larger agent network compared to its rivals, leading to accusations of erecting barriers for its competitors.
We made a strategic decision in February 2014 to remove all exclusivity provisions in our M-Pesa agent contracts," Safaricom corporate affairs director Nzioka Waita said in a statement.
"All our 85,000 M-Pesa agents are, therefore, free to engage with whomever they please (this will include other mobile money service providers)."
Safaricom said it would retain the commission structure it has been offering its agents, noting that lowering the fees may lead to closure of some of the outlets.
M-Pesa's popularity, which has won it 18.1 million customers since its launch in 2007, has largely been attributed to Safaricom's vast network of agents across the country that makes it easy for subscribers to deposit and withdraw cash.
Airtel, Orange and yuMobile, on the other hand, have a relatively smaller number of agents, making it difficult for their customers to make similar transactions using their phones.
This market landscape saw Airtel file a petition with the Competition Authority of Kenya (CAK) in 2012, asking the regulator to compel Safaricom to open up its agent network.
Airtel also wanted Safaricom's pricing of its M-Pesa services investigated, arguing that they are anti-competitive by charging more for money transfers to and from rival platforms. A ruling on the same issues from CAK was expected by the end of last month.
"This was a commercial decision and not one that was forced upon us by any regulatory authority. We are confident that this decision will not negatively impact our business in any way that we cannot comfortably mitigate," Mr Waita said.
The telco had previously fended off Airtel's accusations, arguing that M-Pesa is its proprietary product and that it should not be punished for its commercial success.