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Operators sign ‘first’ interoperability agreement for mobile money in Africa


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Richard Handford

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Three of the leading operators in Tanzania have hailed an agreement that will let  subscribers send and receive mobile money with the users of rival services for the first time.

Tigo, Airtel and Zantel – three of the country’s four largest operators – have reached  agreement with a service scheduled to start at the end of June.

Whereas interoperability is standard with basic services such as voice and SMS, it is rarer with mobile money. In fact, this is the first deal among African operators. Its supporters hope interoperability will increase traffic between users.

The participants define interoperability as being where users can send and receive money across the mobile network and the funds go directly to a user’s account.

However, the current agreement does not include market leader Vodacom, which is a real force in Tanzania’s mobile money market with its M-Pesa service.

Diego Gutierrez, general manager for Millicom’s Tigo in Tanzania, would not comment if the three had deliberately excluded Vodacom, according to the Financial Times.

“There has been a commitment at group level including Vodafone to pursue interoperability,” he said. “The conversations with Airtel and Zantel have moved quite fast but I think that eventually everyone is going to be integrated.”

As well as customers being able to send funds directly to one another’s handsets, other benefits include the ability to send money more affordably and simply without the need for PIN codes when making withdrawals, operators claim.

“Just as we co-operate with our competitors on voice calls and text to help our customers, so we hope to be able to do the same with mobile money and help make Tanzania a global pioneer in digital financial inclusion,” said Tigo’s Gutierrez.

One year ago, three leading operators in Indonesia – Indosat, Telkomsel and XL Axiata – similarly struck an important agreement on interoperability that enabled their subscribers to exchange mobile money with one another.

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  • TLWX

    VERY interesting that the interoperability deal among tier2 and tier3 after national guerilla , now possibly ignites a giant multiplayer Reversi game over Africa about mobile money interoperability, starting from Tanzania !

    Interoperabily announcement between some mobile money operators in Tanzania , regaining some momentum on the national market against the market leader , might give indeed potential signal to some replication spreading all over Africa for the same reasons, at least in countries where mobile money is deployed among enough number of local operators.

    Tier2 and tier3 mobile operators uniting forces in a given country, temporarily against any incumbent Tier1 mobile money leader …. is a mature move to better negociate in future interoperability compensation rates which otherwise would have been set potentially high in favor of the market leader .

    In addition to national tactical moves, the speed of which such moves spread on the reversi gameboard formed by all countries in Africa towards mobile money interoperability , might leave little room in future for Banks to join the movement, or , alternatively build a higher premium price for them to join if definitvely too late with their mobile banking momentum

    Even international money remittance operators might be affected by regional interoperabilty taking up even if it does not include the leading mobile money operator , through some more pressure or opportunities on offered cashout side.

    Of course such wider “unification” at regional levels, of several national interoperabilty “unions” depends basically on dynamics of nationwide interoperabiltiy, but this could possibly be leveraged by some regional operators with multi-country footprint …and specific strategy on the reversi gameboard.

    Shall we bet on a leadtime of 2 to 3 years from now , to reach such crucial point ?
    This , of course without any OTT’s kick in the table of Money Transfers from overseas in the meantime…?

    Of I am sorry … I did forget money gamble is forbidden .
    But no that is fine, technically , we are only talking of instruments for next stage of m commerce and trade, in and to, Africa … which will be promising.