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Telecel reveals they killed off the Skwama mobile money service

Telecel SkwamaRemember Skwama?

It’s the mobile money transfer service which Telecel Zimbabwe started introducing back at the end of 2010. It was launched in January 2011 but before long, its ads and general branding disappeared almost completely. We just learnt the gradual disappearance was deliberate as a decision had been made to let Skwama “die a natural death”.

Telecel Zimbabwe revealed last week that as a company they not going to be doing any mobile money specific operation in the foreseeable future deciding instead to focus on their core competency of GSM mobile telecommunications.

Obert Mandimika, the Telecel Zimbabwe communications and branding director, explained last week that when the Skwama launched it was being run in conjunction with a local Zimbabwean financial institution called Kingdom Bank but soon realised this was limiting the product’s market size. “We felt that given our strategic options at that moment, there was a limiting factor because we have people that are on other banks,” said Mandimika. Telecel then made a decision to connect their mobile platform to more banks, and to do this they partnered ZimSwitch, a financial switching company connecting 19 of the country financial institutions.

At that point, that the Skwama service had just been killed should have been obvious I guess. Telecel was going into the background and the ZimSwitch Shared Services platform came to the fore. ZimSwitch eventually went mobile network agnostic enabling users of any mobile network in Zimbabwe to transact on their platform. This effectively left the Telecel without its own mobile money service, a move directly opposed to the frenzied rush for direct participation in mobile money value added services that most of Africa’s mobile telcos are in.

“Eventually companies whose core competencies ZimSwitch is on the other side and we believe that because each expert is staying in their own area of competency we are likely to get a lot more of the economies of scale and efficiencies in that arrangement” explained Mandimika.

Telecel are alone in this strategic thinking even in Zimbabwe. Both their GSM competitors, Econet and state owned NetOne have mobile money products of their own in addition to providing infrastructure to the ZimSwitch service. Econet’s EcoCash has registered quite impressive growth since launch and recently introduced merchant services to allow mobile subscribers to buy goods using their EcoCash accounts.  NetOne’s OneWallet has been quieter. Unconfirmed reports say the company’s requirement for subscribers to swap in their SIM cards for a higher capacity 128Kb one had affected the uptake of service negatively.

VAS services offered directly by a mobile network operator, or offered exclusively with a partner, if loved by the subscribers are known to increase the “stickiness” of a network, significantly reducing the churn rate. Telecel says however that people will have the choice and they don’t fear the competition. “We believe that where we are going with the plans that we have, people should be able to have that choice, and they will make that choice by staying on one network or the other and we have no fear or that particular competition,” explained Mandimika.

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12 thoughts on “Telecel reveals they killed off the Skwama mobile money service

      1. Companies whose value emanates from stock price speculation as opposed to tangible assets will inevitably leave someone cheated when the bubble bursts. This is more true in the case of web based companies whose value almost always never reflects their real money making potential and terribly short lived life spans! it’s only a matter of time! Facebook has entered the final years of it’s useful life to investors and will enter Myspace phase shortly. Twitter will follow closely behind, the biggest question now is will Google fill that gap (My guess is not really because it’s all too similar to Facebook) I believe there is another social networking phenomenon waiting to happen. It will reinvent what we know social networks to be (probably mobile based) and highly integrated, it will be very simple and intuitive in ways not seen before. at that stage the cycle will repeat itself while Facebook silently sobs dejected in the shadows. Another guess…. Facebook will get bought out completely by another company by 2015!

  1. I like the article from a point of view that VAS are not the sole thing that makes Telecel thrive, mobile money is a great product indeed but the thing it relieves bank note shortages is not quite true in my opinion, generally there isn’t much cash circulating in the economy so mobile money is an efficient way to use money at the moment, maybe with RFID’s things would change if preloaded with a reasonable sum then yes merchants and the transacting public would find even greater use for it.

  2. Honestly, Telecel must grow up, even in subscriber numbers.

    Econet can connect Ecocash with practically any bank and with ZimSwitch as well. This business of starting services and then killing then wastes shareholder capital and destroys brand equity in the eyes of the customer. Telecel is proving itself to be a bad business partner.

    I hope Kingdom Bank learns something from this, that as a bank they must be in full control and ownership of the service and not rely on the likes of Telecel or third parties. FNB in South Africa owns and runs eBucks which are used on several websites in South Africa.

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