MTN rides the wave of surging mobile money
MTN Group has signed up millions of new mobile money subscribers, putting it in a position to enjoy rising revenue in a market that is forecast to more than triple by 2016.
CEO Sifiso Dabengwa said the telecoms operator had sevenmillion of these subscribers in 13 countries at the end of June, a substantial increase compared to the fivemillion-strong customer base it enjoyed at the same time last year.
The service enables users to make a range of transactions through their mobile phones.
It also makes it possible for them to receive money from designated outlets, even if the recipients do not have bank accounts.
A study by Juniper Research released late last year found the number of consumers using mobile phones to make domestic money transfers hit the 84million mark last year, and is expected to reach 340million in the next four years.
These customers would make $55-billion in international remittances in the same period, up from less than $12-billion this year.
"Both network operators and financial service providers in developing markets are increasingly using mobile distribution mechanisms as a means of enabling unbanked or underbanked consumers to access financial services for the first time," said Windsor Holden, who authored the study.
Mobile money's contribution to MTN's revenue in the six months to June was lumped in with the contribution made by data (excluding SMS) at 10% of revenue, or R6.6-million.
Asked to quantify exactly how much it added to the group's revenue, Dabengwa said: "It's still very low . I think the one country where we probably have good contribution is Uganda, which is probably still no more than 4% to 5%."
Dabengwa said MTN aimed to improve the quality of its financial services, which he described as a big opportunity in the markets MTN was operating in.
A similar service by Vodacom, M-PESA, had 3.1million customers at the end of March, with the bulk of them based in Tanzania.
It said transactions worth more than $500-million were processed in the east African country in March alone, contributing 8.5% to revenue. This rose from 2.8% the year before.