MTN Rwanda may not be ready for inter-operator mobile money

MTN Rwanda subscribers are likely to be locked out of the benefits of mobile money interoperability platform that is to be launched in the country soon by its rivals.

Rwanda Today has learnt that telecommunication companies Airtel Rwanda and Tigo Rwanda will soon launch a six-month pilot project for mobile money interoperability while MTN -- the market leader by number of subscribers -- is still upgrading its system.

This also means that mobile money subscribers in Rwanda will continue paying dearly for off-net services. Besides, the delay by MTN to adopt mobile money interoperability will slow down the financial inclusion.

Some analysts see mobile money interoperability as the best way to deepen financial inclusivity by roping in the unbanked Rwandan population.

According to information obtained from GSMA, a firm that bringing in together mobile operators worldwide and local telcos had agreed to implement mobile money interoperability before Christmas this year.

However, some wonder if the telcos will meet the promised deadline for full implementation since the leading player has not yet joined the pilot project, with experts saying local operators seem to work independently.

In many operations, big players in the telco industry have opposed interoperability, wary of ceding part of their dominant market share to new entrants.

Statistics from telecoms regulator Rwanda Utility Regulatory Authority (Rura) as of the first quarter of this year show MTN Rwanda continued to dominate the local mobile money market share. MTN had 49 per cent, Tigo Rwanda 35 per cent and Airtel 16 per cent.

When reached for comment, Arthur Rutagenwa, head of Mobile Money at MTN, confirmed that the company was still undertaking money transfer platform upgrades but did not give a timeline for when it would be complete.

"We are currently doing a platform upgrade; it is about changing the technology version," said Mr Rutagenwa.

Asked why the company has launched a cross-border money transfer srvice yet it was not ready to join the expected pilot project, Mr Rutagengwa said: "This (new service) is being done on an existing platform and it has been on the company's roadmap since January."

Boosts digital economy

He added that timelines can be given by corporate PR service.

Faith Chisulo, head of Mobile Financial Services at Tigo, told Rwanda Today she would provide updated details on the pilot project but not by press time. She had unveiled the project last week.

"There is already interoperability when it comes to SMS and voice; why not use the same thing and try to get the money to flow?" she asked.

Ms Chisulo had said implementation of the pilot project would begin this week.

Experts say mobile money interoperability boosts digital economy and financial inclusion but that, in a young industry, service providers and policymakers should work together to understand the different models of mobile money interoperability, including its costs, benefits and risks.

According to the latest central bank data, accounts for mobile money payments almost doubled from 3.8 million to 6.7 million between June 2014 and June this year.

Last week, MTN launched a cross-border money transfer service with Safaricom, the regional giant from Kenya. Other mobile operators also have also cross-border money transfer services.

According to GSMA, one of risks associated with mobile money interoperability's delay in many markets is fear that new entrants in the market would eat into the profit margins of established agent networks.

"I think it (interoperability) is very important to make the movement of capital very easy, but it has to take time because we have to look at the cost of this service," said Jean Jacque Mutabaruka, an IT solutions expert with tech and financial solutions firm Convergencium.

"We need all electronic payments operators to sit together and discuss the charges," said Ms Mutabaruka, adding that charges are also a big problem since everybody wants to earn money from transfer and transactions.

As the financial sector regulator, the central bank, National Bank of Rwanda (BNR), has been involved in the telcos' interoperability project since 2012.

Industry experts say, the role of a policymaker is to facilitate dialogue between providers, "ensuring that interoperability brings value to the customers, makes commercial sense, is set up at the right time and regulatory risks are minimised."

SOURCE:THE EAST AFRICAN