Tanzania's Vodacom says M-Pesa users hit 1 mln

* Says $12.8 million handled per month

* Service has been running since April 2008

By George Obulutsa

DAR ES SALAAM, Oct 29 (Reuters) - Vodacom Tanzania, part of South Africa's Vodacom Group (VODJ.J: Quote), said on Thursday its M-Pesa money transfer service had attracted more than a million customers since its launch in April last year.

The company did not say in its statement how much money it had handled to date, but told Reuters it was transferring 17 billion shillings ($12.8 million) a month.

Vodacom Tanzania said it had about 2,000 M-Pesa agents working across the east African country. The money transfer service can also be used to pay utility bills and school fees.

Two other mobile firms operating in Tanzania -- Zantel, majority owned by Dubai-based Emirates Telecommunications Corp (Etisalat) (ETEL.AD: Quote), and Zain, part of Kuwait's Zain (ZAIN.KW: Quote) -- offer similar money transfer services on their networks.

Vodacom Tanzania has over 5.9 million subscribers, up from just over 5.4 million customers at the end of last year. It is 65 percent-owned by South Africa's Vodacom and the rest is held by private Tanzanian investors.

The country of some 40 million people had 13 million mobile phone subscribers at the end of 2008.

Most Tanzanians, like many of their neighbours in Kenya's rural areas, have little access to regular bank accounts, and M-Pesa services are seen as an easy way to send cash, especially from people in urban areas to those in the countryside. (Editing by Will Waterman) ($1=1328.0 Tanzanian Shilling; $1=75.30 Kenyan Shilling)