The Star Early Edition

MTN, Vo­da­com in scramble for con­ti­nen­tal dig­i­tal bank­ing mar­ket

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MTN Group is seek­ing to challenge ri­val Vo­da­com Group as Africa’s big­gest dig­i­tal bank by tripling its cus­tomer num­bers within three years.

Al­ready the con­ti­nent’s big­gest mo­bile phone com­pany by sub­scribers, Jo­han­nes­burg-based MTN is adding about 500 000 ac­tive bank­ing cus­tomers a month, chief ex­ec­u­tive Rob Shuter, 50, said.

About 20 mil­lion peo­ple use MTN’s mo­bile bank­ing now, he said.

MTN, Vo­da­com and other com­peti­tors are us­ing more af­ford­able and faster in­ter­net to of­fer bank­ing to peo­ple in coun­tries where tra­di­tional fi­nan­cial ser­vices are scarce. Mo­bile-money ac­counts al­low users to de­posit and with­draw funds via their phones and pay for every­thing from gro­ceries to hair­cuts.

“We re­ally are at that early-adop­tion stage of mo­bile in­ter­net” in Africa, said Shuter, who joined MTN from Vo­da­com par­ent Voda­fone Group in March. In many of these mar­kets, there isn’t suf­fi­cient fixed-line in­ter­net that would be needed for mo­bile bank­ing or even other bank­ing op­tions, he said.

Vo­da­com owns about 35 per­cent of Nairobi-based Sa­fari­com, whose fast-grow­ing M-Pesa bank­ing ser­vice has made it Kenya’s big­gest com­pany.

To­gether they have about 32 mil­lion bank­ing cus­tomers in Africa. Chief ex­ec­u­tive Shameel Joosub said Vo­da­com was the “big­gest bank in Africa,” hav­ing moved about $100 billion (R1.42bn) through M-Pesa in the last year.

The num­ber of mo­bile-money cus­tomers in the re­gion is grow­ing rapidly, hav­ing sur­passed the amount of tra­di­tional bank ac­counts in 2015 to reach 277 mil­lion by the end of last year, ac­cord­ing to Groupe Spé­ciale Mo­bile As­so­ci­a­tion (GSMA). Or­ange SA and Bharti Airtel also pro­vide the ser­vice on the con­ti­nent.


Glob­ally, $269bn was moved through mo­bile money trans­ac­tions in 2016, up from $1.2bn in 2006, ac­cord­ing to GSMA.

In Africa, the 3G net­works needed for mo­bile bank­ing cover only 50 per­cent of the pop­u­la­tion, com­pared with the global av­er­age of 78 per­cent, in­di­cat­ing there’s po­ten­tial for the mar­ket to grow much fur­ther.

MTN has operations in 17 coun­tries across Africa, rang­ing from its largest mar­ket of Nige­ria to Guinea Bis­sau, the small­est. Vo­da­com and Sa­fari­com have net­works in six African na­tions.

MTN’s mo­bile-money growth is de­pen­dent on the com­pany’s abil­ity to in­vest in and de­velop the dig­i­tal tech­nol­ogy needed to har­ness the ser­vice, Shuter said.

Even in the car­rier’s more ma­ture mar­kets, dig­i­tal ser­vices only con­trib­ute about 20 per­cent of rev­enue. MTN also sees its num­ber of ac­tive data cus­tomers, at about 30 per­cent of the to­tal, as a rel­a­tively low level that could be im­proved.

Fur­ther growth op­por­tu­ni­ties could come in the form of de­liv­ery of en­ter­tain­ment to mo­bile de­vices. Spo­tify, the world’s largest on­line mu­sic ser­vice, hasn’t en­tered Nige­ria or South Africa, partly be­cause it doesn’t carry any lo­cal con­tent or have bank­ing con­nec­tions, Shuter said.

MTN shares rose 0.09 per­cent to close at R125.21 on the JSE on Fri­day. Vo­da­com shares closed 0.38 per­cent down at R154.41 on the JSE on Fri­day.

 ??  ?? A Vo­da­com logo out­side the Vo­da­com World mall, op­er­ated by Vo­da­com Group, jux­ta­posed with MTN, which is chal­leng­ing the former for dom­i­nance in Africa’s dig­i­tal mar­ket.
A Vo­da­com logo out­side the Vo­da­com World mall, op­er­ated by Vo­da­com Group, jux­ta­posed with MTN, which is chal­leng­ing the former for dom­i­nance in Africa’s dig­i­tal mar­ket.

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