One of our staff writes a quarterly round up of the mobile money scene. I thought I’d share it with you this quarter. Always interesting times in this sector…<\/p>\n
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Mergers & Acquisitions (M&A)<\/b><\/span><\/p>\n \u00a0<\/span><\/p>\n An evident push for industry consolidation across continents saw potential changes in the Ghanian, Indian and Senegalese MNO landscapes. Bharti Airtel (Airtel Ghana) entered an agreement to merge<\/span><\/a><\/span> with Millicom International (Tigo Ghana) aiming to displace Ghana\u2019s second-largest market player, Vodafone. In Senegal, we saw Wari make a US$129mn bid<\/span><\/a><\/span> for Millicom\u2019s Tigo Senegal; responding to industry rumours of Orange\u2019s initial market interest nine-months prior.<\/span><\/p>\n \u00a0<\/span><\/p>\n Shifting continents, Airtel India\u2019s acquisition of Telenor was green-lit<\/span><\/a>, providing seamless customer and network integration, while simultaneously strengthening Airtel India\u2019s market-leading position. On the contrary, India\u2019s number two player, Vodafone, made a defensive play<\/span><\/a><\/span> to \u2018create a stronger asset\u2019 by initiating merger talks with India\u2019s third-largest market player, Idea Cellular.<\/span><\/p>\n \u00a0<\/span><\/p>\n Product Development<\/b><\/span><\/p>\n \u00a0<\/span><\/p>\n From Uganda\u2019s ReadyPay Solar<\/span><\/a> micro instalment product, Ghana\u2019s eTranzact<\/span><\/a><\/span> mobile money card, the launch of Safaricom\u2019s taxi-hailing \u2018Little Cab\u2019<\/span><\/a><\/span> mobile-based Savings and Credit Co-Operative Society (SACCO) to Bitwala\u2019s<\/span><\/a><\/span> bitcoin M-PESA remittance integration; innovation is rife across both new and old mobile money territories.<\/span><\/p>\n \u00a0<\/span><\/p>\n Sparking significant market interest, Ecobank Ghana launched the first government-based mobile money product, the \u2018TBill4All\u2019<\/span><\/a><\/span> self-service 91-day and 182-day treasury bill. While the first of its kind in Sub-Saharan Africa, the Kenyan government swiftly responded with the \u2018M-Akiba\u2019<\/span><\/a> bond for both Airtel and Safaricom customers.<\/span><\/p>\n \u00a0<\/span><\/p>\n A push towards the legalisation of the Agency Banking Model in Uganda has seen Stanbic<\/span><\/a><\/span> commit to hiring agents with aims to minimise current levels of branch losses (~25%). Ecobank Nigeria<\/span><\/a><\/span> has begun rollout of its Agency Banking locations in partnership with Airtel Nigeria.<\/span><\/p>\n \u00a0<\/span><\/p>\n Market activity from MTN across multiple territories saw the launch of MTN Ghana\u2019s \u2018Yello Save\u2019<\/span><\/a> savings product in partnership with Fidelity Bank, \u2018Tap2Pay\u2019<\/span><\/a> NFC integration and MTN Rwanda\u2019s \u2018MoKash Saving\u2019<\/span><\/a> interest-earning savings product in partnership with the Commercial Bank of Africa (CBA).\u00a0 Due to a lack of commercial viability, MTN South Africa terminated its mobile money payment partnership with the Commonwealth Bank of Australia\u2019s, Tyme<\/span><\/a>. Irrespective, MTN South Africa remains committed in exploring new ways to bring banking services to its customers.<\/span><\/p>\n \u00a0<\/span><\/p>\n Regulatory Environment<\/b><\/span><\/p>\n \u00a0<\/span><\/p>\n Much to the frustration of Ghanian MNOs, the Bank of Ghana (BoG) is set to impose a <\/span>third-party intermediary<\/span><\/a> for inter-MNO mobile money transactions. On the contrary, the International Finance Corporation (IFC)<\/span><\/a><\/span> has launched its campaign to encourage and promote the interoperability of mobile money services in Tanzania.<\/span><\/p>\n \u00a0<\/span><\/p>\n Mobile money pioneer, Safaricom, has come under pressure from the Communication Authority of Kenya (CAK). The first area of concern was raised in terms of fee disclosure<\/span><\/a>, with the CAK encouraging transparency via SMS as a replacement for tariff guides used in the past. More severely, the CAK commissioned a report<\/span><\/a><\/span> recommending that Safaricom separate its M-PESA business from its communications business. While amendments to banking and communication regulations have been proposed, the changes in law must still be approved.<\/span><\/p>\n