With 43 percent of forecast m-money deployments worldwide expected to be in sub-Saharan countries, operators in Africa are approaching the mobile financial services opportunity in two different ways, according to a new report from Pyramid Research.
The insider report, ‘Mobile Financial Services in Africa: Deployment and Configuration Strategies for Operators’, examines the demand for mobile financial services in Africa.
To delve deeper into the choices facing operators, the report has presented case studies of two operators, MTN (with its Mobile Money m-money service) and Orange (with Orange Money), and how they approach the mobile financial services opportunity, looking in particular at deployments across their African affiliates.
“One strategy operators can adopt to address the mobile financial services opportunity is to deploy services sequentially in each country, with the type of services rolled out determined for all countries by the same road map,” said Ousmane Yatera, analyst at Pyramid Research.
“This has some risks, however: local context is considered only lightly or not at all when the service strategy is drawn up,” he went on. “For that reason, the operator has to own a large customer base, possess a strong corporate image and invest massively in marketing, communication and a distribution network to reach critical mass as soon as possible.”
Another strategy is to configure each service deployment to suit the specific country. A number of factors determine which deployment strategy operators should pursue.
According to Pyramid Research, mobile financial services have huge potential in Africa, where a mere 24 percent of the population has a bank account but 75 percent have a mobile phone.
Globally in 2012, 41 mobile money services were launched, and m-money deployments would keep growing, with 43 percent of the forecast worldwide deployments located in sub-Saharan countries.