The mobile money market in Kenya is bound to become a battle field as there are three new service providers expected to enter the telecoms market on Friday morning.
This three include Finserve Africa Limited, a subsidiary of Equity Bank, Mobile Pay Limited, owned by Tangaza Money, and Zioncell Kenya
This three operators to be licensed with Mobile Virtual Network Operator (MVNO) licenses under a new legal regime and will ride on existing operators’ networks to offer select services after signing agreements with the infrastructure owners.
MVNO licences fall under the Application Service Provider (ASP) category, which comes with a fee of Sh100,000 and enables an entity to offer services such as customer registration, SIM card issuance, billing and customer care to end users without holding a spectrum license.
Telkom Kenya’s CEO Mikhael Ghossein said his company will not allow the MVNOs on its network to offer voice or data services because this would compromise the quality of services.
CAK director-general Francis Wangusi, however, said all the three applicants had sought to use Airtel’s Network.
The regulator had last month demanded that Safaricom accept hosting the MVNOs as part of the conditions for the planned acquisition of yuMobile’s assets — signalling the regulator’s intention to make infrastructure sharing mandatory.
Oscar Ikunu, the managing director of Tangaza Money, said having own SIM cards would enable the firm to offer voice, data and mobile money transfer services — a deal that would practically turn them into competitors of the three licensed telecoms operators.
Ikunu said Tangaza Money was in the process of recruiting distributors and agents, creating new employment opportunities in the telecoms sector.
The CAK says licensing of MVNOs is expected to reduce the cost of serving each user and lower subscriber acquisition costs since the providers will buy minutes of usage wholesale from the existing network operators for onward sale to end users.