Mobile Money covers 16% population in sub-Saharan Africa (Africa)
Money transfer via mobile phones has expanded to 16 percent of the total population in sub-Saharan Africa, according to a new World Bank study, as reported by Mobile Money Africa. The Global Financial Inclusion Database, or Global Findex, has found only 3 percent of the population in the rest of the world take advantage of money transfers through mobile phones.
As per the report, in sub-Saharan Africa, take-up of mobile money services, pioneered by Kenya-based Safaricom’s M-Pesa service, has been boosted by the fact that traditional banking is hampered by transportation and other infrastructure problems.
A statement issued by World Bank claims that money transfers through mobile phones is a form of increasingly nontraditional banking that often doesn’t require users to travel or set up an account at a brick-and-mortar bank. Further, such mobile banking allows account holders to pay bills, make deposits or conduct other transactions via text messaging. Kenya, where 68 percent of adults report using a mobile phone for money transactions, has seen particularly impressive growth in this market.
As revealed in the report, said Asli Demirguc-Kunt, the Bank’s director of development policy and chief economist of the Finance and Private Sector Network, said that nearly two-thirds of the unbanked cite poverty as the obstacle to financial access, but about a third also blame the cost of opening and maintaining an account or the bank’s being too far away, which means long bus rides for many.
In markets like Uganda, mobile money transfer services have become a revenue generator, with players hotly competing for users as margins on voice services have been driven down over the years. MTN Uganda, for example, has more than 2 million registered customers after launching in March 2009. MTN reported recently that US$100 million gets transferred over the service every month.
The four mobile money offerings in Uganda including MTN Mobile Money, Airtel Money, Warid-Pesa and Uganda Telecom’s M-Sente are largely similar, allowing registered users to load money into their accounts, make transfers to other users, buy recharge vouchers as well as withdraw money.
IFC Invests in IHS Africa to expand access to telecommunications in Sub-Saharan Africa
IFC, a member of the World Bank Group, along with co-investors Investec and FMO, today announced a $79 million equity investment in IHS Africa PLC to help the company build and acquire mobile phone towers in sub-Saharan Africa, increasing mobile phone coverage and reducing communications costs in the region.
IHS is the largest telecommunications infrastructure provider in West Africa with more than 2,700 towers under management. It is expanding its ownership and leasing operations throughout Africa. The company owns, manages and leases space on its mobile towers to telecom companies, helping to bring down costs, expand coverage, accelerate technology rollouts and improve the quality of service for subscribers in Africa.
IHS Executive Director, Issam Darwish, said, IHS is dedicated to partnering with operators and investors across the African continent. IFC, Investec and FMO are all investors that understand the unique needs of the growing telecoms sector and the changing competitive landscape.â€
Broadening access to affordable mobile telecommunications services remains a crucial part of development across Africa,†said Bernard Sheahan, IFC Director of Infrastructure & Natural Resources for Sub-Saharan Africa and Latin America and the Caribbean. With this investment in IHS, IFC is continuing its commitment to further lowering the barriers to accessing the knowledge, innovation, and improved government and business services that mobile communications can bring.â€
By owning and operating the communications towers, IHS can increase the efficiency and quality of existing networks while helping operators accelerate network expansion into rural areas. IHS is currently working with many of the region’s leading operators to upgrade existing tower sites and facilitate the roll-out of new technologies, including 3G and WiMax.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in developing countries. We create opportunity for people to escape poverty and improve their lives. We do so by providing financing to help businesses employ more people and supply essential services, by mobilizing capital from others, and by delivering advisory services to ensure sustainable development. In a time of global economic uncertainty, our new investments climbed to a record $18 billion in fiscal 2010. For more information, visit www.ifc.org.
IFC to invest US$25 million in HTA (Africa)
IFC, a member of the World Bank Group, has announced that it will be investing US$25 million equity in Helios Towers Africa Limited (HTA) to help the company build and maintain mobile phone towers in several countries across sub-Saharan Africa, increasing mobile phone coverage and reducing communication costs in the region.
HTA is building a pan-Africa tower company starting in Ghana and expanding into other countries such as Tanzania.
According to Helios CEO, Charles Green, IFC understands the unique needs of growing companies in Africa’s telecoms sector and has provided them with a finance package that will allow them to continue their role as the leading independent tower company in Africa, expanding and providing benefits to mobile operators and users in Sub-Saharan Africa.
According to Bernard Sheahan, IFC Director of Infrastructure & Natural Resources in Africa, Latin America and the Caribbean, broadening access to affordable mobile telecommunications services remains a crucial part of development across Africa. With this investment, IFC is further lowering the barriers to accessing the knowledge, innovation, and improved government and business services that mobile communications can bring.
The reduced costs of leasing towers gives new, smaller companies access to existing tower facilities and allows larger operators to expand into remote areas that would normally by unprofitable. Lower tower costs should result in enhanced service offerings and declining mobile prices for African consumers.
M&As round the corner for African Telcos
With increasing competition and the challenge of economies of scale, smaller African telecom companies are considering merging, while larger companies have already consolidated a fair bit.
MTN, Safaricom, Vodacom, Wananchi Group and AccessKenya are some of the companies that have acquired companies and are in the process of consolidating their market positions.
Telecommunications is a network business with economies of scale playing a big role; firms cannot compete effectively if they cannot reach a competitive scale and secure enough subscribers to reap the benefits of scale. In some cases, mergers and acquisitions (M&A) have benefited the markets by lowering costs of connectivity in Internet markets and costs of calls in the voice markets, but there are concerns that too much consolidation will affect competition.
Consolidation might be beneficial in allowing firms to achieve scale and networks effects that would not be possible in a fragmented market, but if there is too much consolidation then the industry tends to become highly concentrated and this can lead to lack of competition between players.
One of the major challenges for small telcos is the lack of infrastructure-sharing policies and the high capital expenditure for rolling out infrastructure capable of competing with bigger telcos with bigger capital budgets.
In many countries, there is no technology in place, companies have to spend a lot of money on infrastructure then focus on the market, stated Tinyiko Valoyi, CEO of Mavoni Telecoms, an investment vehicle that is focused on acquiring spectrum in African countries to deploy 4G networks. For a smaller company it can be a challenge, but the market is maturing in moving away from infrastructure to services.
In sub-Saharan Africa, regulators have had to develop competition policies, but some rules on competition and allocation of national resources are not clear. In other cases, companies are allocated spectrum without meeting the requirements while in some instances the frequencies have been taken back because of non-utilization
Valoyi added that international investors are not aware of other local opportunities and local companies are unaware of where and how to look for financing. In some cases, smaller players who could benefit from financing are not well-structured and don’t meet the international requirements like being listed in the stock exchange, having audited accounts and clear corporate governance processes.
Valoyi feels there is a need for local companies to be aware of international financing requirements and best practices and to align their priorities if they are to grow. He also identifies rural and underserved areas and niche markets as some of the investments that smaller companies can make in order to grow.
Vodafone opens new office to target SA multinationals
www.WirelessFederation.com/news: The global enterprise business of Vodafone opened its office in South Africa targeting locally-based multinational companies. The aim behind this step was to offer consistent mobile solution for multinational businesses besides providing a single service for all their operations irrespective of the country it is based in.
Global Enterprise has its office in the US, Europe and parts of Asia while Vodafone and Vodacom together operates in SA, Ghana, Egypt, Kenya (Safaricom), the Democratic Republic of Congo, Mozambique and Lesotho and Tanzania,.
According to Vodafone Global Enterprise CEO Nick Jeffery, the company will tackle mobile e-mails and single billing sets and can also offer a single price across the globe for its customers as single price can lessen risk across the countries it operates.
While the main focus is on countries where Vodafone operates, it can barter deals with providers in other countries where it has no offices. Both Vodafone Global Enterprise and Vodacom are expected to work together to establish its roots in Sub-Saharan Africa.
