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Mobile money agents apprehensive of new Equity Bank service


by Bedah Mengo NAIROBI (Xinhua) -- Mobile money agents in Kenya fear loss of business once a banking institution rolls out a cheaper cash transfer service.

The agents belonging to Safaricom (M-pesa), Orange (Orange Money) and Airtel (Airtel Money) are anticipating a drop in business as consumers will troop to the cheaper service offered through thin SIM card technology.

Agents of Safaricom, which controls over 95 per cent of the mobile money market in Kenya, will be the worst hit.

The new service is to be offered by Equity Bank through its subsidiary FinServe.

The bank has already received regulatory backing from Central Bank of Kenya and Communication Authority of Kenya and is readying to start the service.

There have been several attempts to block the use of the thin SIM technology in Kenya with opponents citing security concerns.

Equity Bank CEO James Mwangi said the institution would charge transaction fees of 1 percent on all mobile money transactions.

Presently, to send and withdraw at least 11.4 dollars costs 0. 59 U.S. dollars.

On the other hand, one pays 5 dollars to send and withdraw between 574 dollars and 795 dollars.

The low fee to be charged by the new entrant is what is causing worries to mobile money agents.

Their fears are exacerbated by the fact that Kenyans are eagerly awaiting the roll-out of new service.

"If the excitement that has gripped consumers is anything to go by, then we are going to lose business in a big way.

"Nearly every customer who is coming here to deposit or withdraw money is talking about the new service," Martin Bosire, a mobile money agent in Komarock estate on the east of Nairobi, said on Sunday.

Some of the customers have even assured him that they would flee once they get the thin SIM cards.

"The other day one of my loyal customers told me that he had already enrolled to be given the SIM card and it is just a matter of time before he ditches me," said Bosire.

Bosire who has two mobile money shops in the estate gets a commission of at least 561 dollars every month.

"I have struggled to create a group of loyal customers who came here regularly to send and withdraw money, enabling me to get good commission but all this is now at stake."

Bosire’s fears are real. Equity Bank has about 8 million customers, the largest in the East African nation.

Most of the bank’s customers are in the middle and low-tier income category.

To build its customer base, the institution subsidized the cost of its services, making them affordable to millions of unbanked Kenyans. It is this model that it is extending to the mobile money sector.

"It might take time for the new service to pick up, but what is certain is that it will eat into our market," said Dorcas Mueni, a mobile money agent in Nairobi city center.

Mueni makes up to 450 dollars in commission from mobile money services, which she offers alongside selling women shoes and attires.

However, the businessperson is not very much worried about the new service as some of her colleagues, as she already has a plan to keep herself afloat.

"Safaricom has allowed us to offer services of any other operator.

"I will apply to offer services of the new player so that I can forestall loss of income," she said.

The new thin SIM card will be attached to the existing ones, saving mobile phone users need to buy a new phone.


Barthi Airtel Rwanda launches cross-border mobile money in East Africa

KIGALI (Xinhua) -- With growing competition in mobile banking in the telecoms sector in Rwanda, Barthi Airtel, an India mobile operator, has launched a cross-border mobile money transactions within the East African region, to beef up its position as a leading telecoms.

In a statement issued here Saturday, Barthi Airtel said that it is especially looking to harmonize the mobile money platforms to allow its subscribers to send money across the border within five member countries of the East African Community (EAC)

Mobile money—the use of cell phones for money transfers, payments and more sophisticated financial activities such as credit, savings, and insurance—is increasingly popular in East Africa.

Telecoms experts note that Mobile banking is another milestone in achieving a cash-lite economy, where sending and receiving money through the mobile phone is more flexible, convenient, and faster than using cash.

Experts believe that the shift to cross-border transactions by telecoms will help boost their revenues that have been facing low returns in voice revenues and fragile data that is yet to be conquered by the low cost internet usage.

Expected to be implemented soon, the Barthi Airtel’s cross- border mobile money will come as a new tool for the leading giant to shove off the competition from its rival MTN-Rwanda and Tigo Rwanda which launched the same product with their sister company in East African region

It is said that the India’s leading mobile operator has already received a great response from customers, including customers with family ties between Kenya, Uganda, Tanzania, Rwanda and Burundi, as well as businessmen doing cross-border trade.

"This is the result of deep understanding of consumer needs combined with an innovative portfolio of products including money transfers, payments, airtime reloads, cross-border transfers and bank integration," the statement said.

In march 2012, Barthi Airtel launched its operation in Rwanda in a move to expand its footprint on the African continent to 17 countries.

Ericsson, the world’s leading provider of services and technology to telecom operators, was selected to manage the network from end-to-end, including OSS/ BSS solutions and managed services.

Airtel has also partnered with IBM in a move that will enable the telecom to offer superior customer experience in Rwanda.

Rwanda is among the fastest growing telecom markets in Africa and, according to the National Statistics Institute of Rwanda, mobile penetration in the country was at 62 percent as of August 2013.

Econet Wireless Global acquires two African mobile firms

HARARE (Xinhua) -- Telecommunications firm Econet Wireless Global has acquired the assets of Russian global telecoms operator, VimpelCom in Burundi and the Central African Republic for 65 million U.S. dollars as the telecommunications giant continues to grow its footprint in Africa.

Econet Wireless Group chief executive Craig Fitzgerald confirmed the transaction made by VimpelCom to the Cairo Stock Exchange Monday.

VimpelCom operations in Burundi and the Central African Republic were owned by its subsidiary Telecel Globe.

VimpelCom also owns Zimbabwe’s second largest mobile telecommunications firm, Telecel Zimbabwe.

"Yes, I can confirm that our Mauritius registered telecoms holding company, Econet Wireless Global, has acquired Vimpelcom’s two operations in Burundi and Central African Republic," said Fitzgerald.

Econet Wireless Global has operations and investments in telecommunications businesses throughout Africa, Britain, Asia Pacific and Latin America.

It also holds the controlling interest in Econet Wireless Zimbabwe, which is listed on the Zimbabwe Stock Exchange (ZSE).

Econet Wireless Global is a wholly owned subsidiary of Econet Wireless Group, a privately held group controlled by leading Zimbabwean industrialist Strive Masiyiwa.

Fitzgerald said the acquisition did not affect in anyway trading by Econet Wireless Zimbabwe.

"Econet Wireless Global owns a majority stake in the Zimbabwe operation, and it is not the other way round. I know many people make this mistake of thinking that because our Zimbabwean subsidiary is listed, it is also the holding company of all our businesses. Econet Wireless Zimbabwe does not own businesses outside Zimbabwe," he said.

He said Econet Wireless Global is not a listed holding company and had no plans to do so. Econet Wireless Global is also the parent company of Liquid Telecom, which operates Africa’s largest satellite and fibre optic system, with the latter spanning 12 countries.



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