7 September 2008
Kampala — IN another move aimed at keeping the competition at bay, telecom giant MTN will soon launch a money transfer service, sources have said.
The New Vision has reliably learnt that MTN has notified financial regulators of its intention to roll out the service and has quickly moved to the testing phase.
The service is timed to roll out in time for the Christmas/New Year festive season. The service will work along the same lines as the Safaricom M-Pesa in Kenya.
"This is a text booking marketing strategy. Through constant innovation, the leader can maintain his position... Telecom is probably our most competitive industry, you blink and you are gone," a marketing consultant said.
MTN subscribers wishing to send money will register with an authorised dealer and get a new sim card with the new money transfer application. The subscriber will then send money to another MTN user regardless of whether the recipient has registered with a money dealer, or not.
The recipient will then get a notification that he/she has received money and will be able to cash in at the nearest money agent.
The transaction is expected to be carried out for a nominal fee.
In Kenya, market leader Safaricom's similar service, M-Pesa, has in 18 months signed on 3.8 million users and is adding new users at a rate of 10,000 each month.
Latest reports indicate that over Ksh21 billion or about sh504b, was transfered using the service. This has helped consolidate Safaricom's market leadership position.
Recent press reports point to plans by Safaricom to tap into the $57m foreign remittances industry.
MTN's money transfer service comes hot on the heels of the MTN Zone discount service, which offers discounts on calls of up to 99%. This is a response to WARID Telecom's Megabonus, which offers free calls within its network all day after loading airtime worth sh1,000.
With this additional service, experts predict that MTN will disapprove myths about making financial services a mass product.
"Ten years ago, MTN tapped into a nationwide latent market and exposed how much suppressed demand there is in the market. They are testing the market again, this time for financial services. Let us wait and see what happens," a financial analyst said.
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