NAIROBI (Reuters) - Telkom Kenya relaunched a mobile financial services platform on Monday that it hopes can challenge Safaricom’s dominance of Kenya’s lucrative mobile money market.
It said it has spent 1 billion Kenyan shillings ($9.9 million) redesigning and rebranding the platform, T-kash, which enables customers to transfer money and pay bills via mobile phone. The company shut down its original mobile money platform, which drew a limited number of subscribers, last June.
It has now signed up 20,000 new mobile money agents to provide the service, which it hopes will help accelerate its subscriber growth, Telkom Chief Executive Officer Aldo Mareuse told reporters in Nairobi.
Telkom, which is 60 percent-owned by London-based Helios Towers, is Kenya’s third biggest telecommunications company by users.
However, it faces an uphill battle in competing for subscribers with Safaricom’s pioneering mobile money platform M-Pesa, which is offered by 148,000 agents in Kenya, according to the country’s Communications Authority.
M-Pesa has 27.8 million users in a country of 45 million people and has been replicated across Africa and in other markets.
Safaricom has 72 percent of Kenya’s total mobile phone subscribers.
Kenya’s mobile market is lucrative, attracting 537 million financial transactions valued at 1.65 trillion shillings between July and September last year, according to the latest available data from the Communications Authority.
But 95 percent of Kenya’s financial transactions are still done in cash, said Mareuse.
“This is an opportunity for mobile financial services to capture this segment of the market,” he said.
T-kash has features that the company hopes will attract users away from other platforms, Mareuse said.
It claims its fees are now more transparent than competitors’. Like M-Pesa, T-kash will be regulated by Kenya’s central bank.
Safaricom’s competitors say the company enjoys a dominant position in the market, accounting for 90 percent of revenues in areas such as voice calls and text messages, but the telecommunications regulator ditched plans in January to break Safaricom into separate telecoms and financial services businesses.
The government said last month that tree top mobile phone companies will start a pilot scheme to allow customers to send and receive money across networks, a policy change that could help Telkom’s new platform grow.
Information, Communication and Technology Minister Joe Mucheru said the scheme would be a way to help level the market.
($1 = 101.1000 Kenyan shillings)
Reporting by Omar Mohammed; Editing by Maggie Fick and Susan Fenton