Airtel and Telkom eye MPESA Billions in new system

Safaricom’s dominance in the mobile market is set to face the ultimate test as the government seeks to implement recommendations from a 2017 report on the state of dominance in the telecommunications sector. Among the recommendations that seek to reduce Safaricom’s stranglehold on the market is an introduction of a cross-platform mobile money wallet that works across all 3 mobile services providers in Kenya. The new service is set to eliminate any extra costs associated with the transfer of mobile money across various networks.

“This is a service that will make sending and receiving money across networks seamless and will have a lot of benefits for the users who will not be limited in their options,” said ICT Cabinet Secretary Joe Mucheru during the launch.

At the end of the third quarter of 2017, Safaricom commanded an 80.8% share in the mobile market with its platform having transacted an excess of 1.3 trillion during the same quarter. Equity bank’s Equitel came in second with the number of transactions over the same period valued at 322 billion.

The project is currently being piloted among Safaricom and Artel employees with Orange expected to join after relaunching their shut-down mobile money platform.

“We have conducted the pilot for our mobile money service which we finished last month and now we are just waiting for the license from the Central Bank of Kenya,” said Telkom Chief Executive Aldo Mareuse.

Kenya has been lagging behind East African nations such as Tanzania and Rwanda which have already established a common mobile money wallet. In Tanzania, mobile companies Togo, Zantel, Airtel, and Vodacom merged their mobile money network in 2014.

In the move towards integration, mobile companies have agreed to bilateral interoperability agreements. Airtel and Safaricom already have a working agreement although inter transfer fees have not yet been set. However, the companies have come to an agreement not to charge interchange fees.

To streamline the process, the operators will establish and maintain pre-funded accounts from which they draw and deposit to settle the cross-network transactions.

Kenya has a thriving mobile money industry with reports indicating transactions of more than 3.3 trillion in the first 11 months in 2017.

After the one-month pilot, the operators will have to wait for the approval of the regulators, the Central Bank of Kenya (CBK) and the Communications Authority of Kenya (CA), before they can bring the product to market.

Both companies hope to have streamlined inefficiencies within the system and ensure the system can be scaled to a national level.


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