A new report from Pyramid Research suggests that the Mobile Money market in Africa represents a $3 billion opportunity. mMoney revenue, as a percentage of total operator revenue, is expected to rise to more than 5% in 2015.
Mobile Money in Africa: A Big Revenue Opportunity for Network Operators will outline the current demand for mMoney services and the potential benefits that mobile money services could bring to Mobile Network Operators (MNOs) and platform vendors in Africa, with an eye on how the financial success of M-Pesa might be replicated. The identification of challenges that directly influence the success of mobile money services in Africa will be made, with recommendations for how these challenges might be overcome. The present and future social development impact as a result of the availability of mMoney services is also discussed, including highlights of the implications for the unbanked. Finally, three mMoney case studies from Africa will be presented to demonstrate market activity and areas for potential growth.
“mMoney is arguably one of the most profitable uses of the mobile phone that has been seen in Africa,” says Ronda Zelezny-Green, Associate Research Analyst at Pyramid. “Although Safaricom’s M-Pesa in Kenya has long been the lone success story in the mMoney universe, Pyramid can now see success being replicated in Uganda and Tanzania with similar mobile money offerings,” she explains. “MTN Uganda’s MobileMoney service accounts for 3 percent of all airtime sold on its network, and Vodacom’s M-Pesa service in Tanzania currently has 6 million subscribers with exponential growth of 600 percent experienced in the past year alone.”
While the GSMA’s Mobile Money Tracker for the Unbanked lists more than 40 mobile money service offerings in Africa as of March 2011, mMoney offerings remain limited and are concentrated in just 22 of the more than 50 African countries. “The increased presence of mobile phone users is a fundamental component to the success of mMoney services, and large populations in rural areas in Africa represent a market for expansion for MNOs,” says Zelezny-Green .
“Pyramid Research believes that the African mobile money market has the potential to grow to a money-making market, but operators, banks and regulators need to work toward developing an enabling environment for innovative business models that meet service providers’ revenue demands and offer needed mMoney services to end users,” indicates Zelezny-Green. “Collaboration is critical to ensure that all elements are in place to facilitate introduction of mMoney service offers and further contribute to market development and overall GDP growth.”
This mirrors the opinions of MTN Groups Senior Vice President of Commercial and Innovation, Christian De Faria. In an interview with IT News Africa, De Faria said that M-Money is a very important part of MTN’s strategy in Africa.
By Angela Meadon