Money Transfer: the Next Battleground for Uganda Telcos

Mobile money transfer will be the next battleground for Uganda's mobile telephone operators, with plans to launch services by two of the four operators at different stages of development.

An official at MTN Uganda has confirmed that the company is looking to introduce a money transfer service, but the company has kept its plan under wraps.

Meanwhile, Zain Uganda's country manager, Yesse Oenga, has revealed that customers will be able to send and receive money over Zain's One Network, which covers 22 countries in Africa and the Middle East.

In Kenya, Zain has abandoned an e-cash product the firm had launched to counter Safaricom's M-PESA, but the company is replacing it with a new money transfer service. Zain reckons that the new service will be superior to the original, as it will be available to users across Kenya, Tanzania and Uganda, Oenga said.

Should both Zain and MTN go ahead with their plans, a large percentage of Uganda's mobile phone users will be able to send and receive money via their handsets. Zain and MTN have about 5 million subscribers in the country combined.

The move will also open up competition with money transfer service providers like Western Union.

An increase in immigrant laborers from Uganda has led to growth in the country's money transfer sector. Uganda has a steadily growing immigrant labor force in the Middle Eastern, and just this week, 800 Ugandans headed to Saudi Arabia for work. Some 3,000 Ugandans currently work as guards in Iraq, and numbers are also on the rise in Kuwait and the United Arab Emirates.

In taking advantage of this growing market, the two Ugandan operators are following in the footsteps of Safaricom, one of Kenya's biggest mobile operators, which launched its M-PESA mobile money service last year.


Copyright © 2008 IDG Communications, Inc.

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