Wari brakes into West Africa money transfer

WHEN Senegalese money transfer firm Wari agreed to buy the local mobile arm of Luxembourg-based Millicom International Cellular last month, it set the stage to challenge Orange’s hold on mobile phones in French-speaking West Africa.

Wari plans to list on the West Africa stock exchange (the BRVM) in Ivory Coast this year, after the $129 million (R1.64 billion) deal to buy mobile operator Tigo from Millicom is done, its chief executive said..

Wari is Senegal’s top money transfer service, a low-cost alternative to Western Union that allows customers to transfer cash and pay bills at petrol stations, banks and even roadside stands.

The deal will give Wari the capability to transfer money on mobile phones, a rapidly-expanding service that is dominated in the region by French company Orange. Orange has nearly 8 million mobile users in Senegal, twice as many as runner-up Tigo.

While the deal will only give Wari a telecoms licence in Senegal, it could use it as a starting point for a push for greater competition in other French-speaking countries in West Africa such as Mali, Guinea and Ivory Coast.

“For the last mile, we needed to be able to connect the population. This is where the idea came from of looking for a telecom vehicle, and we found (it)… with Tigo,” Wari chief executive Kabirou Mbodje said.

He brushed off a question about Orange. “At the end of the day what’s important is: Do we offer the best services to the population; do we meet their needs; do we design the service to be the most cost-effective? These are the kind of things we’re thinking about, not competition, and then the public will decide,” he said.

Mobile money is a sector with deep potential: millions of people in West Africa lack bank accounts and use cash transfers or mobile money for everything from utility bills to receiving pension payments and receiving remittances from families abroad. Approval needed The number of mobile money transaction points in West Africa grew twice as fast in 2015 as in any other region in the world.

Mbodje estimated the company will be worth “a couple of billion dollars” when listed, a process he said he has started.

An official at the BRVM said it had not yet received an application. The Tigo deal, announced last month, must still be approved by Senegalese authorities.

Mbodje has a relevant background for trying to capture some market share from Orange. He studied telecommunications in France and then launched several digital startups before creating Wari in Senegal in 2008.