Mobile operators need to offer their customers more than just basic voice and text services if they want to boost average revenues per user. And here, there can be little doubt that the continent leads the way in one particular aspect – mobile financial services. MFS, especially mobile money, has long been hailed as an African success story, and the one operator whose name consistently comes up here is Safaricom. In March 2017, the cellco marked 10 years of M-PESA in Kenya with the publication of a study that revealed that when the platform was first introduced in March 2007, it attracted 20,000 customers. By March 2016, that had grown to more than 16 million users, while the value of transactions had risen from KES10.3m (USD101,764) to KES5.2 trillion (USD5.1bn) over the same period.
Tola Wallet platform. Simon Pepper, Tola Mobile’s head of product, reckons VAS has long been associated with ‘premium services’ from European MNOs who wanted to build out their product portfolios and grow ARPUs through additional services on top of just minutes and texts. He believes they tried to introduce services with high price points, such as MMS and LBS, only to find that OTT services have relegated them to just bit pipe providers. But in Africa, Pepper says MNOs in Africa have a different opportunity. “The customer’s handset is so important because it holds their funds through mobile money wallets. It is also fully inclusive in that financial services and a payment method/instrument can be provided to anyone in ownership of a phone, as opposed to them holding a bank account, credit cards, etc.”
According to Pepper, mobile subscribers in sub-Sahara Africa are not as available to OTT service providers as smartphone penetration is not so high. “The use of the Nokia ‘candy bar’ is still how many people make and receive calls and texts, and access their mobile money wallets. Plus, data packages are expensive and limiting.” Few would dispute that ‘banking the unbanked’ is a worthy quest. But is there life beyond mobile money for African MNOs who want to cash in on other kinds of value-added services? Of course, MFS and VAS are not mutually exclusive and one can lead to the other. Pepper says that unlike developed markets, Africa does not have the widespread availability of desktop PCs, laptops or tablets that can offer a platform for mass advertising and commerce, so there remains a huge opportunity to address the MNO’s customer base with digital marketing and services.
Also take a look at our blog on mobile money in Africa