Two of Africa’s largest operators are collaborating to dominate mobile money

Image: Reuters/Philimon Bulawayo
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MTN and Orange—the largest mobile operators in Anglophone and Francophone Africa—are teaming up in an attempt to dominate the continent’s mobile money market.

The pair have launched Mowali, a continent-wide mobile money interoperability joint venture which allows users send money between mobile money accounts across different providers. The service is immediately open to users of MTN Money and Orange Money but can also be enabled for other mobile money providers as well as banks, possibly serving the over 300 million mobile money users in Africa. MTN and Orange alone boast of operations in 22 African countries. But that pool could soon increase as MTN plans to launch its mobile service in Nigeria and relaunch in South Africa.

Mobile money interoperability—allowing mobile money users move money seamlessly between accounts across several providers—has been touted as a necessary feature to remove any limits on financial inclusion. Cross-company and cross-border transactions between Africa’s leading mobile money services will result in reduced costs of transfers as well as a wider reach for mobile money users, especially businesses. Indeed, there’s precedent in Tanzania, the first African country to adopt interoperability, where there has been increased transactions among users. It’s a measure that’s also been adopted in Kenya and Ghana.

Should it catch on, Mowali’s pan-African strategy could pose competition to M-Pesa, the dominant mobile money success story on the continent. While it has gained global acclaim over the past decade, M-Pesa’s service—and success—has been limited to East Africa, particularly Kenya.

The MTN-Orange collaboration is the latest in a wider push by telecoms operators towards mobile money services as a key revenue driver given slowing growth of traditional voice and messaging revenues. Last year, mobile money accounted for 28% of Safaricom’s service revenues while MTN generated around a quarter of overall average revenue per user across 14 countries from mobile money services, according to a GSMA report. Airtel Africa, boosted by a $1.25 billion in fresh investment, is also looking to deploy and “achieve rapid growth” across the continent with  its mobile money service, Airtel Money.