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February 2013 \ Feature \ 25

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FEATURE:

Beyond M-Pesa Africa’s latest cell-phone revolution Africa’s telecoms sectors remains growth leader.

by Mark Kapchanga Africa’s telecommunications industry is undergoing massive growth that could see it become one of the continent’s key revenue earners. A business environment conducive to growth, coupled with better-quality technology, is propelling the sector forward and broadening its income from the existing voice and message services into data and business solutions. Operators in East Africa and Southern Africa in particular are extending their reach to financial services, and thus

“It was an ideal opportunity for us to leverage the powerful assets of MTN to an international audience, and to show that the time for Africa had come. It meant a lot to us to be part of a unique global movement,” - Sifiso Dabengwa,

MTN Group President and CEO,

benefiting large segments of the unbanked rural population. Kenya’s Safaricom Limited controls about 60 per cent of the country’s mobile services market, supported by its strong network, solid customer care and money transfer service. With its innovative mobile technology, Safaricom has over 19.2 million subscribers. Its mobile money transfer service, known as M-Pesa, allows those without a bank account to transfer funds as quickly and easily as sending a text message. The first to operate on a large scale in the world, the product is a joint venture between mobile phone giant Vodafone and Kenya’s Safaricom. “Once customers have an M-Pesa account, they can use their phones to transfer funds to both M-Pesa users and non-users, pay bills, and purchase mobile airtime credit for a small, flat, per-transaction fee. The affordability of the service has been pivotal in opening the door to formal financial services for Kenya’s poor,” said Bob Collymore, the firm’s Chief Executive Officer. Five years after its launch, the service is now facilitating an average of $320 million in transfers per month, about 10 per cent of Kenya’s gross domestic product. The rapid uptake of M-Pesa is a strong vote of confidence from local users in this new technology. It shows how huge the demand for remittance services is in Africa. In recent months, M-Pesa has begun allowing institutional payments, enabling companies to pay wages and collect bill payments. Experts say the recent launch of M-Shwari, a new banking product for

M-Pesa customers that allows customers to save and borrow money through the phone, could further revolutionise the mobile operations in Kenya. With M-Shwari, one can access emergency loans at affordable rates. But it is the entry of Bharti Airtel in the mobile money transfer business that could give Safaricom a run for its money. The Delhi-based operator says its service will enable clients to carry out a crossnetwork transfer at a lower charge than its competitors. The company retains plans to acquire one of South Africa’s mobile operators after a failed bid in 2009 when it attempted to buy MTN. As at February 2012, Bharti Airtel had more than 246 million customers. Ranked among the top five mobile service providers globally, with operations in 20 countries across Asia and Africa, the company recently overhauled its network in Africa. It upgraded and extended these networks, which include switching, radio, network management, data and consumer-services systems. Airtel Kenya Managing Director Shivan Bhargava

Gateway to Africa February 2013  

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