In a move that will definitely change the competition dynamics of local mobile money, telecash, the mobile money arm of Telecel has made it free to transfer money to a registered telecash subscriber.This automatically places telecash as the cheapest mobile money transfer option for the Zimbabwean market.
The new wave of “tariff treats” also comes with reduced tariffs for sending money to non-registered subscribers across all local networks and with the 5 cents charge placed by the regulator on all transactions being covered by telecash with that freebie. telecash will however maintain charges for cash-outs.
Through slightly cheaper services, new products like the telecash Gold Card and now free mobile money transfers, Telecel has been putting up a strong fight for the growth and success of their mobile money option. In its first six months telecash had grown to 600,000 subscribers.
Telecel was the last operator to roll out its own mobile money service, which together with the need for success of add-on services in telecoms is what seems to be driving such ambitious market growth tactics.
While any reduced financial burden will undoubtedly be welcome by subscribers, this is a rather gutsy move from Telecel. This price reduction’s long term focus in terms of subscriber growth and loyalty, if not as successful as anticipated could have a negative impact on performance that now relies more on services like mobile money and less on voice revenue.
It will be worth the watch to see how the other mobile money services like market leader EcoCash which has 4 million subscribers, responds to this price reduction.