Interoperability Agreement Signed Between Leading Tanzanian Mobile Money Providers

> Posted by Jeffrey Riecke, Communications Associate, CFI

Over 16 million mobile money customers in Tanzania are now connected to one another thanks to an interoperability agreement announced Wednesday between mobile network operators (MNOs) Tigo, Airtel, and Zantel. An important act of market cooperation on the continent, the inability (or high cost) for mobile money users to send money to those of different providers has caused industry-wide fragmenting, impeding the utility and uptake of mobile banking services.

The newly connected services make up three of Tanzania’s four leading MNOs, and their mobile money products – Tigo Pesa, Airtel Money, and EzyPesa – are three of the country’s four mobile banking options.

The fourth player in the market is Vodacom with its M-Pesa service, the sibling service to the runaway success of the same name in Kenya. Included in the press release announcing the agreement was an expression of support from the three MNOs for a recent statement made by Vodacom in favor of interoperability, with mention that an interoperability linkage to Vodacom would be welcomed.

The market’s mobile subscriber breakdown is roughly 35 percent Vodacom, 31 percent Airtel, 31 percent Tigo, and 12 percent Zantel. The mobile money subscriber split is about 53 percent Vodacom M-Pesa, 18 percent Tigo Pesa, and 13 percent Airtel Money, with 16 percent of subscribers using two or more services.

Tanzania is one of the fastest growing mobile money markets, as a new case study from GSMA indicates. The four providers are responsible for 31.8 million registered accounts, 11 million active on a 90-day basis, and 153,369 agents. Tanzania’s population is roughly 48.5 million. The frequency and volume of mobile money transactions in the country is growing quickly, with the monthly average at 99 million transactions totaling over 3 trillion TZS (US$1.8 billion).

Tigo’s General Manager Diego Gutierrez compared the move by the three companies to the mobile phone industry’s early days when similar interoperability agreements had to be made for voice calls and SMS messages between customers of different providers.

The new services are expected to take effect by the end of the month.

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