Competing in the mobile money space

In the early days of mobile money, MNOs launched mobile money services to differentiate themselves from their competitors, hoping both to increase the loyalty of their customers and to attract new ones. As the number of mobile money services continues to grow, the situation has changed in many markets.

Today, we count 34 countries where there are at least 2 mobile money services for the unbanked. In these markets, MNOs launch mobile money not to differentiate themselves, but because they don’t want to lag behind their competitors and lose customers.

With competition emerging in the mobile money space, we now see battles over price, but also attempts to better adjust services to the needs of unbanked customers and to increase the quality of service.

In Rwanda and Tanzania, Tigo illustrates that it is possible for operators to compete successfully in mobile money even when they have been slow to market and/or are not the market leader in the mobile business

The 2011 Global Mobile Money Adoption Survey has identified Rwanda as one of the fastest growing markets for mobile money. In a recent blog post, I explained how MTN Rwanda is now emerging as a new success story in the mobile money space. Two years after the launch of MTN MobileMoney in February 2010, MTN boasted 415,000 registered customers. MTN has a market share of 70% in Rwanda in terms of number of GSM connections. However, the competition over mobile money is fierce.

Tigo launched its mobile money service Tigo cash in May 2011 in Rwanda. It managed to leverage the high level of awareness of mobile money among the population – largely due to MTN’s marketing efforts over the past 2 years – to sign up over 260,000 customers in just one year. This is more than MTN one year after the launch of MTN MobileMoney. Airtel, which became the third operator in Rwanda in March, is also planning to launch its mobile money service by the end of the year.

Vodacom, the dominant mobile operator in Tanzania, launched M-PESA in April 2008. In comparison to the extremely rapid adoption of M-PESA in Kenya, the service grew more slowly across the border.[1] However, Vodacom was tenacious, and by September 2011 it was able to announce that there were more than 2 million active M-PESA customers in Tanzania—one-fifth of Vodacom’s mobile base.

In the meantime, however, competition in the mobile money market had emerged. Zain introduced a rival offering, Zap, in February 2009, a service which was re-launched as Airtel Money in October 2010; Zantel launched ZPesa in 2007 and re-launched it in May 2010; and Tigo brought Tigo Cash to market in September 2010.

The 2011 Global Mobile Money Adoption Survey allows shows that Tigo was able to capture significant share from Vodacom during the first half of 2011. In a countermove, Vodacom recently announced an across-the-board reduction in fees for M-PESA.

Tigo’s early success in Tanzania and Rwanda are important, because it illustrates that it is possible for operators to compete successfully in mobile money even when they have been slow to market and/or are not the market leader in the mobile business.

In Pakistan, competition between Telenor and UBL has led them to differentiate their product offering

There are two mobile money services in Pakistan: Easypaisa, which is offered by Tameer Microfinance Bank, in which Telenor Pakistan holds a 51% ownership stake, and Omni, a service of United Bank Limited. Both services allow customers to transact without first opening an account; for Telenor, the third mobile operator in Pakistan by market share, this decision was motivated by a desire to serve customers without a Telenor SIM.

Mobile money is catching on in Pakistan very quickly: according to the State Bank of Pakistan, transaction volumes have increased from 3.5 million transactions in Q1 2011 to 20.6 million in Q4 2011.

The data show that Easypaisa and Omni have highly differentiated offerings. Easypaisa dominates when it comes to [2] Bulk payments represented 18% of the total number of payments it processed in June 2011—while Telenor had not conducted bulk payments up until June.

[1] “What makes a Successful Mobile Money Implementation? Learning from M-PESA in Kenya and Tanzania”, GSMA,

[2] “Case Study: United Bank Limited Supports Cash Transfer Payments,” Bankable Frontier Associates (

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