By It has been a week of dramatic contrasts for Safaricom. On one hand, the company posted the best financial results in its 25-year history, crossing a milestone that was once unthinkable for an African telco. On the other, a High Court judge delivered one of the most stinging intellectual property verdicts ever issued against a Kenyan corporation, finding that the company essentially took an independent innovator's idea, dressed it up in its own branding, and rolled it out as its own product without consent.
Both stories are important. Together, they paint a complicated portrait of East Africa's most powerful technology company, one that is undeniably successful, but now forced to reckon with serious questions about how it treats the innovators who orbit its ecosystem.
The Record-Breaking Numbers: KSh 100 Billion and a Historic Dividend
Safaricom's financial results for the year ended March 31, 2026, are genuinely impressive by any standard.
Safaricom Group net income climbed to KSh 100 billion, representing a 67.3% jump year-on-year. Safaricom Group service revenue rose 11.5% to KSh 414.1 billion, crossing the KSh 400 billion mark for the first time in the company's history. Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) grew 35.4% to KSh 220.5 billion, with EBITDA margins expanding to 56.8%. These are not just good numbers for Kenya. They make Safaricom the most profitable company in East and Central Africa.
The Kenyan business, which remains the core of the group, delivered service revenue of KSh 400.8 billion, growing 10% year-on-year. Earnings Before Interest and Tax from Kenya rose 15.3% to KSh 182.3 billion, while net income from the Kenyan operation alone reached KSh 119.1 billion, a 24.7% increase.
The dividend announcement was equally historic. Safaricom declared a total payout of KSh 80.1 billion, equivalent to KSh 2 per share, representing a 66.7% increase from the prior year. This comprises an interim dividend of 85 cents per share and a recommended final dividend of KSh 1.15 per share, subject to shareholder approval. Shareholders have rarely had reason to complain about owning Safaricom stock, and this payout only reinforces that.
Safaricom Group CEO Peter Ndegwa described the results as reflecting strong execution across both markets. "We have shown strong execution in the first year of our five-year strategy," he said, adding that the company surpassed its own guidance despite currency pressures and market repair actions in Ethiopia.
The Ethiopian business, which has been a costly but strategically critical expansion, continues to mature. Safaricom Ethiopia now serves more than 13 million customers, and the company has simultaneously boosted its total investment commitment in that market to $2.65 billion, signalling long-term confidence in the country despite near-term challenges.
Across the group, Safaricom reached 71.6 million total customers, reflecting what the company described as continued trust in the brand and strong demand for digital connectivity and financial services.
M-PESA remains the crown jewel. The mobile money platform continues to be the single biggest driver of profitability, and its revenue trajectory is directly relevant to the legal storm that broke at almost the same moment the financial results were announced.
The Court Ruling: How a Teenage Wallet Idea Became a KSh 1.4 Billion Judgment
While Safaricom's investor briefing was underway, a High Court judgment was quietly but powerfully reshaping the company's week.
The ruling, delivered by Justice J.W.W. Mongare, found Safaricom liable for copyright infringement in connection with its M-PESA Go product and the "Manage Child Account" functionality. The court awarded Peter Nthei Muoki and his company Beluga Limited KSh 1.4 billion in damages, along with an ongoing royalty of 0.5% of Safaricom's gross M-PESA revenue in each financial year, for as long as the company continues operating M-PESA Go, Manage Child Account, or any substantially similar parent-child financial control functionality.
The backstory begins in October 2020. Peter Nthei Muoki and Beluga Limited developed a concept called the "M-Teen Mobile Wallet USSD Code," an M-PESA sub-wallet designed specifically for teenagers aged between 13 and 17, and young adults aged 18 to 24. The product was built around detailed USSD menu structures that allowed parents to control spending, track transactions, manage beneficiaries, and monitor usage in granular ways. Peter formally registered the concept with the Kenya Copyright Board and later approached Safaricom to pitch the idea.
Between March and June 2021, he held meetings and made detailed presentations to senior Safaricom executives, including Sitoyo Lopokoiyot. The meetings apparently went nowhere officially. Safaricom declined to take the product forward. Not long after, Safaricom launched M-PESA Go, a product with strikingly similar functionality targeting essentially the same demographic.
Peter sued Safaricom in 2022.
What followed was a multi-year legal battle in which Safaricom attempted to defend itself on two fronts. First, the company argued that copyright law protects the expression of ideas, not the ideas themselves, meaning that a general concept like parental control over a child's mobile wallet could not be protected. Second, Safaricom and its technology partner Huawei claimed that work on a parent-child control system had already begun internally before Peter ever made his presentations in 2021.
The court rejected both defences with notable sharpness.
On the first argument, Justice Mongare ruled that Peter and Beluga Limited were not claiming ownership over the abstract idea of parental controls. They were claiming protection over the specific, detailed, and structured expression of that concept through unique USSD menu flows, reporting mechanisms, restrictions, and operational architecture. That level of specificity, the court held, is precisely what copyright law is designed to protect.
On the second argument, the court found the evidence presented by Safaricom and Huawei deeply unconvincing. The judge highlighted glaring inconsistencies in the documentation, suspicious gaps in the record trail, and the absence of a final Functional Requirements Specification document for the alleged pre-existing Huawei project. The court stated that the Huawei proposal appeared to be a belated attempt to construct a paper trail to defeat the plaintiffs' claim. That is one of the most damning findings a Kenyan court has made against a major corporation in recent memory.
Justice Mongare further criticised the company's conduct during the case, noting that Safaricom's failure to produce critical documents allowed the court to draw an adverse inference against it. She also pointed out that Safaricom continued to roll out and profit from the disputed product even during active litigation, which the judge described as falling short of the standards expected of a market leader.
The Financial Weight of 0.5% of M-PESA Revenue
The KSh 1.4 billion lump sum is significant, but in isolation, it is actually manageable for a company that just posted KSh 100 billion in net income. What makes this ruling genuinely consequential is the ongoing royalty structure.
The court calculated the KSh 1.4 billion using 1% of Safaricom's M-PESA revenue for FY2024, which stood at over KSh 140 billion. The judge described this as a conservative but commercially reasonable figure. Going forward, the court imposed a compulsory licensing arrangement requiring 0.5% of gross M-PESA revenue each year, tied to the continued operation of the disputed functionality.
To understand what that means in practice: Safaricom's M-PESA revenue has been growing consistently and aggressively. In FY2026, with overall service revenue at KSh 414.1 billion and M-PESA firmly at the centre of that performance, 0.5% of gross M-PESA revenue represents a meaningful and recurring annual cost. The bigger M-PESA grows, the bigger the royalty bill becomes. And Safaricom has every intention of growing M-PESA.
The court declined to issue a permanent injunction stopping the product entirely, citing public interest and the millions of users who already rely on M-PESA Go and the Manage Child Account functionality. This was actually a partial win for Safaricom: it gets to keep the product. But it now pays for it, every year, indefinitely, until it stops using the disputed features.
Safaricom has secured a 30-day suspension of the judgment while it prepares a challenge at the Court of Appeal. The legal fight is far from over. However, the High Court's findings of fact, particularly those around the paper trail and the internal conduct, will make any appeal a steep climb.
What This Ruling Means for Kenya's Innovation Ecosystem
This case is bigger than Safaricom versus one inventor. It carries a message that should reverberate through every boardroom and every startup in Kenya.
For independent innovators, it offers a genuine precedent. The court's ruling proves that formally registering your intellectual property with the Kenya Copyright Board matters. It proves that detailed documentation of your concept, including USSD flows, menu structures, functional architecture, and meeting records, can constitute legally protected expression. And crucially, it proves that pitching your idea to a large corporation does not mean surrendering it, especially if the corporation later launches something suspiciously similar.
The judge's final remarks were pointed and deliberate. She described the case as a cautionary tale for both sides. For innovators, the lesson is to protect your work formally before approaching anyone, particularly large players who have the resources to replicate what you show them. For corporations, the lesson is equally stark. When you receive an unsolicited proposal from an outside innovator and decline it, any internal product you subsequently develop in that space must be genuinely, demonstrably independent. Anything less, and you risk exactly what Safaricom now faces.
This ruling is particularly significant because it is not the first time Safaricom has been caught in disputes of this nature. In a separate earlier case involving a developer called Samuel Wanjohi and Popote Innovations, a KSh 1.1 billion arbitration award over alleged idea theft related to the M-PESA Super App was ultimately overturned by the High Court because no signed contract existed. That case came down to paperwork. This case came down to copyright, and copyright is far harder to neutralise without credible evidence.
The broader point for Kenya's tech ecosystem is this: corporations that sit at the centre of a digital economy have enormous power over the innovators who pitch them ideas. The power asymmetry is real. A Kenyan startup with a compelling idea but no legal protection is essentially defenceless if a larger player decides to replicate their work. Courts are beginning to push back on that dynamic, and this ruling is the clearest signal yet.
A Company at a Crossroads
The timing of these two stories could not be more ironic. Safaricom is, by every financial metric, at the peak of its powers. KSh 100 billion in net income. KSh 80.1 billion flowing back to shareholders. A customer base of 71.6 million across two countries. A five-year strategy that is, by management's own account, off to a strong start.
And yet, at this precise moment of corporate triumph, a court has looked under the hood of M-PESA and found that one of its features was built on someone else's work, without permission, and without compensation, until a judge forced the issue.
For Safaricom, the challenge now is not financial. The company can absorb KSh 1.4 billion without structural pain, and even the ongoing royalty, while meaningful, is unlikely to change its trajectory. The real challenge is reputational, and it is particularly acute because Safaricom has consistently positioned itself as the engine of Kenyan innovation, the platform on top of which the country's digital economy is built. That narrative becomes harder to sustain when a court finds the company helped itself to a small innovator's registered, detailed, and documented concept.
Safaricom will appeal. It will argue that the findings of fact were wrong, that the independent development narrative was credible, that the USSD similarities do not constitute copyright infringement. Those arguments will now be tested at the Court of Appeal.
But the reputational damage from Justice Mongare's language, about shifting explanations, missing documents, and a belated paper trail, does not wait for appellate outcomes. It is already circulating, already being read by entrepreneurs who are deciding whether to pitch their next idea to Safaricom, and already being discussed by the investors and partners who watch how Kenya's largest company handles adversity.
The record profit is real. The legal trouble is real. Both are part of the same week in Safaricom's history, and both deserve to be taken seriously.
Comments