Airtel’s mobile cash business shrinks despite opening of M-Pesa network

Airtel Kenya’s mobile money transfer business registered a loss in subscriber numbers and agents in the three months to March according to a Communications Authority of Kenya (CA) report, despite having benefited from the opening up of Safaricom’s vast M-Pesa agency network following intervention by the regulator.

The CA’s report for the first quarter of the year indicates that Airtel lost 3.5 per cent of its Airtel Money subscribers in the three months under review to register 3,122,519.

The number of its agents dropped 7.4 per cent to 10,179, in a period that saw Mobicash gain most agents (1,791) to reach 13,672 — which translates to a 15 per cent rise.

Telkom Kenya’s Orange Money also managed a 12 per cent growth of its agents to 15,419 while Equity’s Equitel gained the most as its subscribers more than doubled to 665,661.

“During the quarter under review, the number of mobile money transfer subscriptions rose by three per cent to reach 26.7 million up from 26.0 million subscriptions registered during the last quarter.

“The number of active agents grew by 3.9 percent to stand at 126,622 up from 121,924 agents recorded during the last quarter,” reads the CA report.  

From the latest industry statistics, Safaricom has 20.6 million customers, an increase of 2.4 per cent over the previous quarter.

M-Pesa also registered a total of 85,756 subscribers in the three months under review, translating into a 2.5 per cent increase. 

Airtel has been pushing for regulations to enforce inter-operability of the M-Pesa network with rivals.

READ: Airtel renews calls for regulators to declare Safaricom

Such a regulation, Airtel argues, would provide it and Orange Money a chance to catch up with Safaricom, which is way ahead of the two competitors.

Airtel also previously asked the Central Bank of Kenya to come up with a ceiling tariff on what the operators can charge for sending money across networks.

In July last year, Safaricom opened up its entire M-Pesa agency network to rivals, meaning the estimated 85,000 M-Pesa shop owners can now also sign as agents of Airtel Money and Orange Money (offered by Telkom Kenya) under the same premises.

The opening of M-Pesa agents’ network to rivals was, among other things, expected to level the playing field but this is yet to be witnessed.

Safaricom classifies rival network subscribers such as those of Airtel as “unregistered” users of the M-Pesa service, charging them up to double the cost incurred by its own customers.

“There is a very huge price difference on what Safaricom charges its subscribers for sending money to rivals, this and the large network effect makes it impossible for consumers to send money outside the network,” Airtel Kenya managing director Adil El Youssefi told the Business Daily in a previous interview.