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Africa, News

Kenya officially gives green light to three MVNOs

Kenya’s number of mobile money players could jump from four to seven after the country has officially awarded three mobile virtual network operator (MVNO) licences this week.

The Communications Authority of Kenya (CAK) made a statement on Thursday about the awarding of the licences.

Recipients of the MVNO licences are Finserve Africa Limited, a subsidiary of Equity bank, Tangaza’s Mobile Pay Limited and Zioncell Kenya Limited. MVNOs typically sign lease agreements with the existing operators in order to use their infrastructure in distributing their network to their target clients.

These companies have been awarded the MVNO licences under the ‘Application Service Provider (ASP)’ category, which allows them to offer several mobile money services related services.

This means they could join Safaricom, Orange, Airtel and yuMobile in offering mobile money services in Kenya.

The move to award the MVNO licences; however, has received opposition from Telkom Kenya (Orange), after reports indicated that the company was determined not to allow the three entrants to be hosted on their infrastructure.

Telkom Kenya said that such a move could compromise the quality of services for their customers.

The CAK; though, responded by saying that the MVNOs had already indicated they will utilise Airtel Kenya’s network infrastructure at a fee.

MVNOs will boost Kenyan telecoms competition, says expert.

Speaking to ITWeb Africa, Dorothy Mwikali, a financial advisory expert at investments firm Baobab Capital, said, “This will definitely lead to increased competition and consequently ease of access to mobile money services, with the customer set to benefit the most.”

“We have seen cases where Kenyans remain to a particular service provider because of their mobile money service, a possible reason why number porting failed immensely in this country” added Mwikali.

“With the new competitors in place, mobile money users will be spoilt for choice, and we could soon start witnessing price wars as each competitor tries to woo customers to their service.”

Mwikali added that with the cost of sending and receiving money remaining significantly high, price wars could allow Kenyans to save more on transactional costs, and as a result trade more, which in the long run becomes beneficial to the country’s economy as a whole.

Kenya’s telecoms and mobile money market is currently dominated by one player: Safaricom.
Safaricom has over 20 million subscribers in Kenya and over 11 million users of its M-Pesa mobile money system.

Souce: ITWeb Africa

More on the African MVNO market at MVNOs Industry Summit Africa, 24-25 June 2014, Johannesburg, South Africa

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