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Safaricom negotiates lower sales commission rate

mobile3gsafaricom

Kenyan mobile operator Safaricom has negotiated a lower sales commission fee with its majority shareholder Vodafone, according to a report.

Vodafone -- which has a 40% stake in the Kenyan telco -- previously took a 6% commission fee for all sales and services that were procured by the group on behalf of its local subsidiaries.

The reasoning behind this had been that Vodafone Group could secure lower overall costs by bidding on a global basis for goods and services.

As a result, Safaricom last year made payments of Sh2.1 billion to Vodafone

But according to a report in the Business Daily newspaper, the 6% commission has been replaced with a flat fee of Sh412 million, which will rise to Sh618 million next year.

"We have converted from a variable to a fixed rate for greater certainty and to secure a more favourable deal for Safaricom," said Safaricom chief executive, Bob Collymore

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