Benzinga | Jul 23, 2021 01:38PM EDT

Vodafone Could Spin-Off M-Pesa To Tap Pandemic-Driven Popularity: Bloomberg

* Vodafone Group PLC (NASDAQ:VOD) indicated a possible spin-off of its African mobile money service M-Pesa following pandemic induced demand surge, Bloomberg reports.

* Vodafone aims to form its financial services activities into a new legal entity.

* M-Pesa is a mobile money service for people even without conventional bank accounts. About 41.5 million active customers carried out over 12 billion transactions in 2019.

* Established in 2007 by Vodafone's Kenyan associate, Safaricom, M-Pesa has more than 430,000 active agents operating across the Democratic Republic of Congo (DRC), Egypt, Ghana, Kenya, Lesotho, Mozambique, and Tanzania.

* Vodafone's majority-owned South African subsidiary Vodacom Group Ltd recently partnered with China's Alibaba Group Holding Ltd (NYSE:BABA) to develop VodaPay for the new smartphone users.

* The telecom firm reported first-quarter FY22 revenue growth of 5.7% year-on-year to (euro)11.1 billion, aided by a 5.6% organic growth.

* Service revenue growth in Europe and Africa and recovery in handset sales drove the numbers.

* Service revenue grew 3.1% Y/Y to (euro)9.4 billion.

* Vodafone Business service revenue increased 2.7% driven by solid growth in IoT and digital services.

* M-Pesa transaction volumes rose 45% Y/Y.

* The Europe mobile contract churn was 160 basis points lower than Q1 FY20.

* The roaming and visitor revenue grew 56% Y/Y, but still 54% lower than Q1 FY20.

* Price action: VOD shares traded higher by 2.13% at $16.56 on the last check Friday.