MTN seeks to dominate Africa's mobile service sector

Africa's largest mobile-phone company, MTN, has declared its intention to be the largest mobile money service provider on the continent, launching the service in 22 countries.

MTN is ready to provide the service to 80 million subscribers with no access to banking services, said Dare Okoudjou, head of mobile money and international development at MTN.

The service has improved on lessons learned from MTN's mobile money service in South Africa and other challenges faced in East Africa by Safaricom's Mpesa money transfer service.

"The service has complied with various banking regulations, is more secure and makes it easy to detect money laundering," said Okoudjou. "To deliver the service, MTN has partnered with Fundamo, a mobile financial services and software provider."

In a deal worth nearly US$10 million, MTN will use Fundamo's software technology to deliver secure services.

"MTN Mobile Money is a SIM-based version of Fundamo's Mobile Wallet Solution version 3.1, specifically designed to meet the needs of MTN's subscriber base," said Aletha Ling, Fundamo's executive director.

The system offers ATM-level security and a PIN system that allows sensitive information to be accessed by the user.

"Fundamo can support the concurrent multicountry rollout; the solution is mature, scalable and well-tested in developing markets, as well as being designed from the ground up to be fully compliant with all banking regulations," Okoudjou said.

Compliance with banking regulations and security of the networks have been cited as the major challenges in operating mobile money transfer services.

In Kenya, the government has held back Safaricom's plans to offer the Mpesa service across East African borders, citing banking regulations and the need to partner with an international financial institution.

"The best thing with MTN mobile money is that the central banks in countries like Ghana, Ivory Coast and Nigeria are similar and collaborate in other areas; consolidating the service will be easier," said Okoudjou.

After a successful launch in each country, MTN hopes to interlink the services and provide transactions across the borders. Before the launch, MTN conducted pilot projects in Uganda, Cameroon, Ghana, Cote d'Ivoire, Nigeria, Benin, Congo Brazzaville, Guinea Bissau, Guinea Conakry and Liberia.

Apart from mobile money transfer, MTN recently completed the 1.4 billion South African rand (US$140 million) acquisition of networking company Verizon SA, giving it 23 percent of South Africa's data traffic market. The company has begun the rollout of a 5,000-kilometer nationwide fiber-optic network.