MTN has arguably been the market leader in providing mobile money services in Uganda, however recent glitches in the system has left pundits wondering whether it can handle the increased capacity.
MTN's dominance has existed despite the presence of Uganda Telecoms M-sente and Airtel's Airtel Money. Warid Telecom is the latest entrant in the mobile money frenzy as at the end of December last year, it launched Warid Pesa.
Warid has for over the last six months been postponing the launch of this service. Understandably so, they needed to build a robust system that can be able to provide an alternative to the other mobile money providers.
"Users will be able to use the electronic money to pay for goods and services via their mobile phones," says Shailendra Naidu the Chief Commercial Officer Warid Telecom Uganda.
MTN Uganda has aggressively marketed its mobile money project by making the service available in strategic areas of the country, ranging from small kiosks to the large centres to cater for customers of various walks of life.
It has also strategically been able to front itself as a platform that can be used to pay school fees, utility bills and other services including the purchasing of goods. MTN controls at least over 75% of the mobile money market and daily transactions of $90m.
Warid Pesa, is at the fore front of gaining such prowess only if it markets itself so well and provide a reliable and more efficient service. Warid must do a lot to ensure that customers embrace it since its voice service is among the poorest in the country. It is evident that whenever power goes of some areas cease to receive Warid signals.
MTN mobile money has gone through some turbulent three months where its service has been trusted less, however this has not stopped people from using it but with another competitor in place, some customers may consider other options.
Uganda has about 12million mobile phone users of the 35million, meaning that they are able to reach out to quite a good number of customers who are unbanked. Moving money through these platforms is more efficient and time saving hence keeping banks at bay. "This service needs to be accessible to customers at a time they need it and should have a robust security system that makes it safe and reliable," said Godfrey Mussajja the Deputy Director
Commercial Banking at BOU.
This new frontier is also likely to re-ignite new turf wars. Mobile companies last had to reverse their tariffs to unsustainable levels in 2010. This strategy ignited price wars that were at first welcomed by customers, but in long run were not sustainable for businesses that were borrowing heavily. Even despite the increase in tariffs, there are still huge costs of operation hence the need for alternative sources. Whereas the war on voice calls seems to have cooled, there is a clear match-up for the data market and now the mobile money services.
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