- Equity Bank’s mobile banking arm outperforms old players such as Airtel Money, Orange Money and Mobikash to command 14.4 per cent of the transactions in the second quarter.
The battle for mobile phone money transactions business is changing in a manner that may cause various players to stop and take notice.
The Equitel mobile banking platform, for example, has eclipsed three older rivals to register 14.4 per cent of the total value of transactions offering real competition for the dominant M-Pesa.
Data from the Communications Authority (CA) for the three months to June shows that a total of Sh138.5 billion was transacted through Equitel against a total of Sh957 billion that passed through all the six mobile money transfer service providers.
Equitel, which was launched in July 19 last year, has raced far ahead of Airtel Money (Sh10 billion), Orange Money (Sh191 million) and Mobikash (Sh373 million).
It is still, however, far off Safaricom’s M-Pesa which moved a total of Sh807 billion in the quarter (84.3 per cent).
“The total number of transactions during the quarter was registered at 375.8 million with an equivalent of Sh957.0 billion transacted amongst the users,” a CA report says.
Equitel, operated by Finserve Africa — Equity Bank’s mobile virtual network operator (MVNO) — combines both banking and telecoms services including voice, data and SMS on a single SIM card.
Equitel had two million subscribers by the end of June compared to the older players Telkom (5.2 million), Airtel (6.5 million) and Safaricom (25.9 million).
By the end of June Kenya had 39.7 million mobile subscribers, up from 38.3 million subscriptions registered in April with MVNOs and introduction of new services contributing to the growth.
“The number of mobile subscriptions continues to increase remarkably and this can be attributed to increased market entry by MVNO’s and expansion of mobile network infrastructure by the service providers,” the CA says in the report.
“The continued growth in mobile subscriptions has been driven by proliferation of mobile data services such as, m-commerce and m-banking services as well as hand set affordability.”
Despite Safaricom holding 65 per cent of the mobile subscriptions it commands more than three-quarters of the voice market at 77.8 per cent. The telco posted 7.9 billion minutes of talk time in the three months to June.
Airtel’s share of the voice traffic was 13.9 per cent (1.42 billion minutes), Telkom 7.8 per cent (803.6 million minutes) and Equitel had 47.4 million minutes.
The report says that the minutes of use (MoU) per month per subscriber declined to 86.0 minutes during the three months under review down from 89.0 minutes registered in the previous quarter.
The decline in voice traffic at a time when the number of subscribers is going up coincides with a massive increase in the use of text messages.
The implication is that people are preferring to send messages than call, an indication of the fact that it is cheaper to send a text than talk on phone.
“The total number of messages sent through the Short Messaging Service (SMS) during the quarter grew significantly to reach 11.6 billion messages up from 6.5 billion messages sent during the last quarter,” the report adds.
The overall mobile revenues for the six players jumped 24 per cent in the year to June 2016 to stand at Sh214.8 billion, with about a quarter of this ploughed back as investments.
Despite the impressive growth in revenues, the sector has maintained a lean workforce with the number of employees growing by 0.5 per cent to 6,178 in the year under review.
Telcos are continually rolling out value-added services to complement their voice and SMS offerings with the additions giving room for revenue growth as the market gets saturated.
The value-added services include mobile information services, mobile transaction services and mobile entertainment services.
The CA Access Gap Report released early in the year shows that 94.4 per cent of the Kenyan population is covered by a mobile network.
“The mobile network is expected to expand further during the next financial year following the commencement of Universal Service Fund projects, which include the rolling out of mobile network in 202 sub-locations,” said the report.