Calendar Q2 figures for many of Africa’s most prevalent operator groups show excellent results across the board for mobile money, placing the size of Vodacom’s goal to become the continent’s dominant mobile money player into sharp focus.
Since Vodafone Group announced the company intended to sell its stake in Safaricom to affiliate Vodacom in May, both Safaricom and Vodacom have talked-up their abilities to export Kenya’s wildly successful m-Pesa model across the continent.
In July, Vodacom’s CEO Shameel Joosub said it aimed to be formidable in financial services in Africa. To achieve this, the company is reportedly assessing entry into countries where it currently doesn’t have a presence. It will also have to scale-up operations in the five markets it already operates in.
Although m-Pesa has taken on all-comers in Kenya, the brand enjoys a less dominant status in other countries, where competition is much stiffer and demand may not be as high. In South Africa, where Vodacom abandoned the service in May 2016, Joosub himself said the market conditions were simply not there to support it.
M-Pesa’s market share of mobile money subscriptions in Kenya is around 80 per cent, according to official statistics for the first three months of 2017. In Tanzania, Vodacom’s version has around a 42 per cent share, according to 2016 GSMA Intelligence figures. Although still market leader, rival services from Airtel and Tigo were not far behind with shares of 24 per cent and 31 per cent respectively at end-December 2016.
In many African markets Vodacom’s rivals have a significant footprint and are pumping resources into mobile money services. Although independent comparative market data is hard to come by, according to their own figures Vodacom’s potential rivals are showing significant growth.
The batch of financial results released over the last month for the quarter to the end of June show growth from all major parties.
Orange Money – which operates in 17 markets in Africa and the Middle East – reported a 65 per cent year-on-year revenue growth for its mobile money business and now reaches 32 million customers.
Meanwhile, Airtel Money – which operates in 15 countries in Africa – increased its customer-base by 2.8 per cent year-on-year in Q2 to 8.7 million. Its total number of transactions during the quarter increased by 28.1 per cent to 388 million compared to 303 million in the corresponding quarter last year. Its total value of transactions increased 31.4 per cent year-on-year.
Although not releasing a complete breakdown of figures for the quarter, Millicom said its financial service platform saw 13 per cent growth year-on-year across its Africa operation.
MTN also did not announce a comprehensive quarterly report for Q2, but revealed its active money customer numbers increased 18 per cent during the first half of 2017 to reach 17.9 million active customers across its markets.
Vodacom itself is also enjoying increased usage with m-Pesa revenue up 7.4 per cent in its latest quarterly earnings statement.
With growth experienced from all major market players, gaining the dominant position Joosub targets will be difficult, especially in markets where Vodacom has no brand presence.
It will be interesting to see how it pans out and which elements of the Kenya model Vodacom attempts to export. One thing is for sure, though, replicating the 80 per cent market share recorded by Safaricom in Kenya will require something extraordinary.
The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.