MTN set to support money transfers between Rwanda and Uganda
By Omondi Julius Odera, Kampala, Uganda
In a move aimed at warding off competition and increasing revenue collection from its mobile money service, MTN Uganda has partnered with MTN Rwanda to deliver cross border transactions between the two countries.
The service, which is expected to take off by the end of October, comes just a few months after the successful launch of a similar module by MTN Rwanda’s fierce competitor, Tigo. Tigo effected a similar model of cross border mobile money transfer among its clients within Rwanda and Tanzania, a move that has been hailed by the users as more creative, affordable and convenient.
The South African telecoms giant MTN has set the end of October 2014 as the period to integrate its mobile money system of MTN Rwanda with that of MTN Uganda, and allow subscribers to send and receive money between the two countries.
According to Norman Munyampundu, MTN Rwanda’s general manager, the two sister telcos would sign a partnership deal by the end of this month. “I am optimistic that the service will reduce the cost of transactions and enhance cross-border trade between Rwanda and Uganda. For us, this a positive milestone seeing our mobile money sector going regional and should be good news for traders, parents, students and travelers between the two countries,” noted Munyamoundu.
Earlier this year, Tigo started cross-border mobile money services with its sister companies Tigo Tanzania and Tigo Rwanda.MTN Mobile Money penetration in Rwanda expanded by 81 percent by end of September, contributing 44 percent of the firm’s revenues. Local Telcos have lately been seeking new avenues through which they can increase their earnings following a poor run over the past many months.
Mobile money payments increased by 94 percent, from Rwf134.1 million end of June last year to Rwf260.7 million this year. The number of transactions increased from over 21 million to over 43.5 million during the period, according to the central bank monetary policy and financial stability statement released in August.
In Uganda, it’s estimated that over 14 million subscribers use the mobile money service. In the last financial year, figures from Bank of Uganda indicated that the value of mobile money transactions jumped by 40 percent to Ugx18.6 trillion. Consequently, MTN Uganda which controls almost half of the market announced that mobile money contributed to almost a half of its profits last year. "The annual results indicate that MTN Mobile Money continued to perform well in Uganda and recorded a 47 percent increase in registered subscribers to 5.2 million, with more than 25 million transactions per month," according to a statement from MTN issued last March.