Archive for the ‘mobile money’ Category

Syzygy – Release 2 – Uganda Mobile Money Cost Estimator

Syzygy is a Uganda focused utility calculator (launched by this post https://ssmusoke.com/2015/08/11/launching-syzygy-uganda-focused-utility-calculator/), this new release adds a tool not available anywhere else allowing you to estimate the costs of a mobile money transaction. Are you sending to a registered number, unregistered or trying to withdraw from an agent or ATM?

Hope this app saves you the hassle of searching for the transaction chart which is usually hanging in the agent’s booth.

Do let us know what you think of the new release.

The link to the app is http://bit.ly/syzygy-ug

A screenshot of the new calculator is below

Mobile Money Cost Estimator

Mobile Money Cost Estimator

Alternate Approach to Voice Price Wars in Telecom Industry in Uganda

My colleagues at Styx Technology Group are looking at alternate approaches to telecos in Uganda to increase their ARPU (Average Revenue Per Unit) a metric for revenue from each customer, instead of the current price war tagged to 3/= per second (US$ 0.1 per minute).

  1. Accept that voice is now commodity, being pushed further out by VOIP for both regular users and business, due to the improving Internet connectivity both via fixed and mobile connections. There is no longer a competitive edge to having cheaper voice, the revenues are fixed and can only go lower
  2. Bundled services: Currently there are separate plans for voice, SMS and data, which have to be purchased daily or when needed. The monthly plans have a premium attached, so without looking at the numbers I suspect that a majority of the regular users purchase daily plans as and when is needed. The telecoms can create bundled plans (already existing for voice) to include SMS and data without the hefty premium. Additional incentives can be provided for further discounts when a user pays consistently for a plan for 6 months, without any breaks.
  3. Smartphone Device and Service Contracts: While these are being gotten rid of in the US and Europe, the market in Uganda is ripe for disruption, where smartphones are paid over 12 to 24 months, with bundled services. Obviously the argument here is the risk associated with lending in Uganda, but options include partnering with financial institutions can help reduce the risk profile, work through employers to deduct the costs of the contract directly at source.
  4. Multiple Smartphone Data Plans: This is similar to the device plans above, however this allows the owner of the plan to register additional devices for monthly fee to share the data. This has been common with unlimited plans, and would provide a new revenue stream.
  5. Extending Mobile Money Services: The best service to copy is PayWay with a wide range of devices, and platforms on which to use the service based on what infrastructure the agent has. I would like to be able to swipe my VISA card and transfer money to my account without having to go through the bank interface which tends to be down more often than not.
  6. Bulk Sales of Devices to Schools: The new underlapped customer base, sell more devices to schools get parents to pay part of the costs to push e-education services, why do kids still have to fill Advanced Level and University Level choices on paper forms that can be lost? With powerful tablets in the $50 to $100 range only the telecoms have the clout, network and drive to push this through.
  7. Custom Devices and Services: These are for data collection needs, surveys etc, which can be accessed through third parties but pushing the envelope on what is possible. The key here is flexibility of service, enabling channel partners build and innovate by creating custom services and plans to meet their specific needs.
The telecoms need to think of blue ocean strategies to create new markets, provide ability for others to leverage their platform investments for new revenue channels, leveraging the example of Amazon that has created a multi-billion dollar technology infrastructure business based on solving internal problems.
What do you think?

UPDATE: This blog post follows the same thinking as The Telecom Wars in Uganda – Round 5 – 2015 and Beyond on this blog too

Mobile Money will not die by 2020 but Evolve to Survive

Nicholas Kamazi has an interesting perspective in his article, 5 Reasons Mobile Money Is Going To Die By 2020, which I fundamentally disagree with. While he caters for challenges with Mobile Money (MM), he does not take into account who uses MM and why, which are the reasons for the pervasive nature. Rebutting each reason for the death of MM:

  1. Death of Feature phones:
    • Battery life: smartphones are no where near the battery life usage of feature phones, and in areas where there is little availability of electricity to charge the phones, this becomes a deal breaker
    • Cost: I do not see $35 dollar smartphones becoming that popular
    • Rugged: Feature phones can take alot of abuse, falls, drops, plus general wear and tear which current age smartphones cannot match
  2. Digital Currency: Africa in general and Uganda in particular, are cash economies. MM just allows people to move money from one place to another very quickly.
  3. Unnecessary Charges:
    • The cost of sending MM is usually less than transportation and time for moving to acutally deliver the money without the risk.
    • Most transactions are between UGX 50,000 to UGX 150,000 (US$20 to US$60) usually under urgent situations
    • Urgency of transfer – most transactions happen with a need for urgency for example school fees, social functions, emergencies of different nature. Which can happen at any time of day or night, until there is an option which is that flexible MM is here to stay
  4. Capital Investment:
    • MM is a defensive option for telecoms as their core business is getting eroded, and will evolve in order to remain relevant.
    • I do not see any startup having the size, and capabilities to compete with the telecoms in this market, Uganda in particular and Africa in general.
    • Even in Asia the agents are the key, however managing them is not an easy process so the incumbents will remain in play for the next 5-10 years.
  5. Business environment shift: the telecoms are here to stay, and MM will evolve along with the business environment.

Mobile Money is here to stay as it is:

  • Pervasive with 20,000+ agents and counting
  • With the telecoms opening up to 3rd parties for utility payments, diaspora remittances, merchant transactions
  • Rural-urban social dynamics which form the bulk of MM remittances within a country
  • Infrastructure challenges such as roads, railways which also provide a conducive environment for MM as an option for money transfer.

Your thoughts?

The Telecom Wars in Uganda – Round 5 – 2015 and Beyond

The telecom wars in Uganda just got a new lease in life, however looking forward the next round will claim some casualties. Why do I call this Round 5?

  1. Round 1 – Oct 21, 1998: MTN comes into Uganda, after a monopoly by Celtel (now Airtel) where simcards fell to the equivalent of US$30 with a monthly service fee of $10
  2. Round 2 – 2007 to 2009: Warid and Orange launch in Uganda, the Value Added Service Provider (VAS) boom, thanks to James Oloo Onyango for pointing this out
  3. Round 3 – 2009 to 2012: Mobile Money wars
  4. Round 4 – 2013 and 2014: Airtel acquires Warid telecom, Smart Telecom & Vodafone join the fray, MTN launches voice bundles

At this point each of the telcom companies operating in Uganda have voice bundles, data and internet plans plus mobile money platforms. With international calling plans falling towards zero, currently even cheaper than local network calls, social media/VOIP/Messaging applications cannibalizing SMS revenues, the battle for survival is ever-fierce with the any mis-step proving fatal.

Looking into my crystal ball, the next round is going to be fought along the following avenues:

  1. Mobile Money Partnerships – with banks, utilities, and other commercial players to entrench mobile money transfer deeper into the economics of the country.
  2. Service Partnerships – can be seen around data & internet services, so that the telecos are not reduced to dumb pipes. The agricultural, health and education sectors will see a new push for value added services via SMS in order to keep the users captive on a specific network.
  3. Personalized Bundles – combined voice, data and SMS bundles are not yet the rage, but they will gain prominence
  4. Family Bundles – with families having more than one phone, I see a push towards shared bundles to reduce the costs of new customer acquisition & increasing opportunity cost of switching. The impact of this tactic will be further complicated by the multi-sim phones that most consumers have.
  5. Smart device leasing plans – one I have called for, complicated by lack of a national ID, but I see success for whoever nails a working version of business model first.
  6. Business Customers: Majority of the telecom usage is personal, however business customers provide an interesting selling point with a knock on effect for smart devices, family or business plans and shared bundles. Most users are forced to use a service or network convenient to the bread winner or trend setter.
  7. Quality of Service: after all that is said and done, when the costs are almost at par, the quality of service for a specific provider will become a critical deciding factor both for business and personal use.

With all this opportunity also comes great peril, from the following:

  1. Niche players – ISPs for Internet and data as the capabilities for deploying metro-wide WIFI accelerate, informal money transfer services especially under Islamic banking
  2. Regulatory pitfalls and taxes – the impact of the recent 10% excise duty on mobile money fees is yet to be assessed
  3. Mobile Virtual Network Operators – are they friend or are they foe? Partner or competition if running atop of your infrastructure?
  4. Market saturation with falling revenues per customer – the telcos need to innovate to stay atop of the fast moving market that is to render them dumb pipes and their services commodity
  5. Number Portability – when this comes, it will disrupt the players as it abstracts the underlying providers.

How do you see the telecoms responding to these threats, please share in the comments below ….

UPDATE: Round 2 includes VAS providers who saw exponential growth in revenues at this time using SMS based solutions

Mobile Money – The Next Frontier Ubiquity

Mobile money is on an exponential growth curve in Africa, due to the growth in mobile phone penetration of GSM SIM based phone networks, and is considered the next frontier in financial inclusion for the unbanked, and easing the costs of transactions on the continent. The primary success of M-Pesa by Safaricom in Kenya is driving adoption, but now that the teething challenges are being understood and models for dealing with them are becoming more prevelant, maturity challenges are now becoming more prominent and are causing many to wonder whether the promise is being achieved.

Starting primarily as a money transfer solution by telecoms it has proven to be a lucrative alternate revenue stream for the telcos who are being pressed due to increased competition in voice (now a commodity), lower charges in international calls from Voice over IP (VOIP) alternatives, higher capital costs for infrastructure to support a burst in mobile data growth, and lower phone usage due to social networks like Facebook/Twitter/Google+.

The next step is to grow into a mobile commerce payment solution, for merchants, organizations and businesses in order to compete against established players like banks and other financial institutions, debit and credit cards, online payment systems like Paypal/CheckOut/Google Wallet, NFC based mobile payments. Overcoming this frontier means delivering a more streamlined user experience to the consumer which is key to adoption.

Below are 10 features and approaches that I think mobile payment solution providers need to do in order to become relevant in the mobile payment space:

1. Merchant originated payment requests – current mobile money systems are setup so that the payee sends money to another number, which leads to errors if the entered number is incorrect (which is a major customer headache). Having merchant originated payment requests, almost like the withdrawal requests from agents, can reduce the errors in the transfer since the customer only has to approve the transaction.

2. Delayed payment outside the current session – the money transfer can only be completed in a single session, however if the payment request can be made and stored on the customer’s phone (like an invoice), and the payment made at a later date can provide an efficient invoicing/payment for coommunity delivered services like utilities, education, etc

3. Payment request forwarding – allow the payment request to be forwarded to and fulfilled by another number

4. Telco Number Independence – where number portability is not available, the ability to use mobile numbers from competing telcos, which means one service can grow out and reach all customers

5. Transaction Payment plans – other than per transaction, allows a larger volume of transactions to be done at a lower cost

6. Easy creation of merchant accounts to increase the ubiquity of usage

7. 3rd Party system integration points – since a lot of the mobile money systems are tightly integrated with telecom systems this raises the costs and slows the pace of integration with other businesses like banks

8. API for system integration – providing APIs through which 3rd party providers can integrate with the mobile money systems via the web and Internet to support online transactions

9. Standards – there is no standard for the mobile money services therefore any integrator needs to interface differently to each system. These standards can extend to using contacts in mobile phones

10. Support for alternate delivery channels such as mobile phone, web and desktop apps to increase ubiquity

What are your thoughts?

Career Changes, New Opportunities and Challenges

June 2012 is here and well along with it comes some changes to my career (have not had any for the last 12 years), and while it brings up a host of new opportunities there is a swathe of new challenges too.

So where do I start, I have been leading a team of software developers, and we have grown over the years through blood and sweat, while it has been an exciting journey, it has been a tough one. An opportunity arose and I have now changed tracks joined Mercy Corps (http://mercycorps.org) which is focused on changing lives through laser focused interventions which not only create a change in livelihoods, but are backed by an exit strategy for sustainability (which I find interesting, challenging and intriguing).

What will I be doing there, well I coordinating AgriFin Mobile in Uganda, a multi-year regional project to bring together partners to “bundle” financial and agricultural extension services to improve the yields and livelihoods of small holder farmers, all of which will be delivered via mobile technology. The press release for the program is here http://www.mercycorps.org.uk/pressreleases/27064

In addition I will also be working to push technology to support the realization innovative program approaches that Mercy Corps is championing, to rephrase a common phrase “throwing bombs of IT innovations and solutions” and watching their effects.

And yes I intend to “Be the Change” 

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