All bets are on mobile money & data as SMS declines and telecoms shifts

Nigel Gambanga Avatar
NetOne OneWallet Mobile Money

NetOne_OneWallet
Numbers don’t lie, especially in business, and when the right sort of numbers are going up it becomes a celebrated truth.

From the surface the Zimbabwean mobile telecoms scene is in pretty great shape. In a conclusion to the quarterly performance report POTRAZ, the industry regulator, spelled out how the third quarter of 2014 noticed a 9% increase in revenue. There’s a cause for celebration there.

There are a lot of investments made by all the mobile network operators (MNOs) that have contributed to this. The leader though is mobile money transfer and payments services. What started off as an adoption of a service that had succeeded in other parts of Africa has now come out ahead as just the right kind of cushion in a volatile economic environment.

In the three months ending September 2014 the transfer and transactional value on mobile money services came to $403,149,620 which is a 16.3% increase from the previous quarter of the same year. This is a remarkable increase in capital volumes considering the very sad song every other financial services provider has been singing.

The number of mobile money subscribers also went up, with close to 700,000 new users registered in the third quarter of the year. That is a commendable feat in terms of product and service uptake and these are hardly the sort of numbers that can easily be pulled in any sort of industry, especially financial services, in such a short space of time.

Let’s not forget the increase in the number of agents as well (4,181 new agents to be exact) something that every company especially the banks, which handled retrenchment last year would be envious of without a doubt.

The industry has shifted and the cheese has moved

In spite of all of this though, these good times are fraught with challenges. On net voice traffic declined by 8.8% even though each of the operators had promotions to engage subscribers. VoIP services which are competition to mobile networks, are showing growth judging from a 50% increase in calls from mobile to the cheaper service and a 52.2% rise in calls from VoIP.

Another steady revenue stream, SMS, has also shown a decline of 9.8% for cross network messaging. WhatsApp is the obvious cause here, what with the bundles introduced as a revenue booster. You can bet that SMS is set for an even bumpier ride as smartphone penetration rises. In short whatever telecoms used to be has changed.

What has been carved out in phases over the past year and a half is now becoming very clear. Mobile network operators have to pay even closer attention to two pillars; the financial services delivery arm that mobile money and payments has grown to be and convenient data services that can disrupt the old communications model.

With a flailing financial service sector that has a lot of missteps and bad macro-economic hands to blame for this, mobile money has managed to come in as the best remedy. How it continues to grow however will depend more on the added services it can support.

It’s what was figured out and executed over the past 18 months and now the numbers are clearly indicating this, even in the face of economic uncertainty.

In 2014 we had a slew of new offerings which included mobile money wallet cards, cross border remittances, transfer agents that morphed into banks and insurance all under mobile money. There should be more related services that hopefully show an element of creativity, solve a clear pain and attract many subscribers.

The same can be said for data and Over the Top (OTT) services that help use the infrastructure that has been invested in. WhatsApp is just one example but if the changes the IM service has undergone in the past couple of days has shown, tech won’t stay constant. The environment is very dynamic and more disruption, which could be in the form of a WhatsApp VoIP service, is around the corner.

Without going to far back into history to look at the glory days in telecoms, at the presentation of last year’s financial results for Econet Wireless, the local telecoms leader, SMS and data had a 14% contribution to overall company performance. Data services are going to have to step up to maintain or improve that contribution.

Whether it’s going be a new OTT service, a more aggressive introduction of mobile broadband to subscribers (15% smartphone penetration is very weak) or a more attractive suite of what is already available (price structure goes a long way actually); the overall objective should be boost data consumption faster than SMS use which is declining.

, ,

2023 © Techzim All rights reserved. Hosted By Cloud Unboxed