Nigeria Mobile Marketing

The telcos in Nigeria are taking the battle to the next frontier in coming months: Mobile Money. Not to be left out of this race are Banks and Independent providers which had seen the clearly untapped potentials in an economy of only 20 million Bank accounts and 60 million mobile subscribers under an addressable market of 140 million people. No one wants to be left behind in the evolving ecosystems.

As the likes of MTN, Zain and NSDT provider, Tagattitude of France, are getting ready to commence Mobile money Transfer and payment in Africa’s largest Mobile market with over 62 million mobile subscribers, the banks are warming up to any provider that will deliver the best value in terms of returns and value. While Zain’s partnership with citi Bank has been widely reported in the media but it is still unclear which technology that they will be deploying. For now, No news is coming out from the second National operator, Globacom on Mobile Money roll out plans.


MTN will be using the USSD technology and will partner with banks for a National roll out in coming months. USSD, Unstructured Supplementary Service Data which is also a form of sending messages over a GSM network is not very similar in terms of processing the message from source to destination. USSD is comparable to when a subscriber is loading airtime to the phone using the x and # commands.

The major drawback for this technology is that users will require to remember the strings or codes to initiate a transaction, it is session oriented which means it terminates if the network situation is poor or congested ,does not store any transaction History, Transactions must originate from the Subscriber mobile Phone.

From the users point of view, many semi literate folks might find it challenging to remember the strings or it is too long or not easy to recall and will also require some form of Identification to receive remittance from the Banks or agents points.


Both operators, MTN and Zain will be adopting the Operator – Bank model. In this model, the mobile operator will provide the infrastructure while the Banks will be cash in and cash out points. The main advantage for both parties are that existing goodwill and customers can be rapidly converted with lower cost of customer acquisitions and also the Branch networks of the Banks will serve as service points, most likely the service centers of mobile operators will join as agent points as significant transactions are already been undertaken at those points. The Major draw back of this model is that the customer will still require to physically visit the Banks for Remittance collections and it might be a challenge for those in the semi Urban and Rural areas where the spread of Bank Branch Network is limited and no form of Identification.

The Near sound Data Transfer technology provider, Tagattitude of France which had also won the Global Consumer Product Innovations Prize twice at the GSMA will be deploying, the Bank – Independent Agent Model. They do not provision services to end users directly. The Banks will be at the fore front working with Agents like Micro Finance Banks, eateries, Fuel stations, Transport firms and even corner shops across the length and Breath of Nigeria.

The Main advantage of their offering is that is 100 percent independent of the Networks, easy to use as users will only require to make a simple call and immediately compatible with all Mobile phones and Networks, GSM, CDMA and even Landlines. The Language menu can be domesticated for major Local Languages in Nigeria or even Africa.

The major draw back for the service is that people with impaired hearings may not be able to use the service.

Unlike USSD, Near sound data transfer is a combo of services and transactions can be initiated from diverse sources. It can be deployed for local and international Remittance, person to person payment, Salaries and wages, ATM, POS,Local and International credit cards and online.

On the international Remittance angle, established operators might lose out if they don’t quickly implement a mobile strategy or they can either team with the likes of Tag whose technology is adoptable to suit their offerings and available across all Networks and mobiles.

For the Operator promoted model, it immediately corners millions of existing subscribers already on their platform but the major draw back is that transaction can only be initiated by On network subscribers. It could turn out in different ways as it may push up subscriber base and on the other hand, serve as a funnel syndrome to limit service availability non network subscribers.

The evolving ecosystems will be keenly contested and any model that offers better value will carry the day but for sure some upsets are in the offing from the likes of Tagattitude.


Emmanuel Okoegwale
Nettelafrica Telecommunications and policy scholar
Emmanuel@gomobileng.com.

Africa and Nigeria particularly is about to witness a new revolution that is comparable to the advent of Mobile phones but this time around, the growth will be exponential, rather than organic. Mobile Money Transfer and Payment, is coming to 55 million subscribers, soon. Mobile payment firms in the likes of Tagattitude of France - Near data sound Transfer Mobile payment systems , MTN, Zain and others are getting ready to enter largest mobile market in Africa.

While the Tagattitude model is more of providing mobile authentication solutions to the Financial Institutions and Non financial Institutions, others like, recently licensed MoneyBoxAfrica, will actually engage the end user and provision services directly. Nigeria, currently has no mobile payment systems provider with significant National Footprint in a market of 55 million subscribers and addressable market of 140 million people. The opportunities are immense with strong value realization.

The growth of the Nigeria Mobile subscription base has been very impressive in the last Nine years, from 450,000 fixed lines to 55 million mobile subscribers, is no mean feat. Mobile payment is poised to drive subscription uptake further in coming months as Mobile payment systems becomes part of the financial channel.

According to the GSMA, Mobile Money transfer services includes services whereby customers use their Mobile device to send and receive monetary value. The market for mobile money transfer leverages the ubiquitous of the mobile phone and the interoperability of the technology to provide easy to use and secure mechanism for millions of people, worldwide. In Countries like Philippines, where Mobile payment and Transfer was quick to gain ground, 40 percent of day-to-day transactions had already moved to the mobile which is quite significant.

Mobile Payment and Transfer will significantly help in financial inclusion in a country like Nigeria with only 20 million bank accounts and 55 million mobile users,lower cost of transactions since small value transactions can take place without the need to leave the comfort of the home or office, drive growth and development especially amongst the financially excluded lower segments of the economy which do not have the basic requirements to open a Bank account.

The Traditional financial regulations is no longer appropriate for the new emerging mobile money transfer and Mobile payments in Africa. The telecommunications giants, despite their inadequate knowledge of financial systems had seen the clear and present disconnection in Payment systems and financial inclusion in Africa and hence are foraging into domains that are not originally theirs. MPESA is telecos owned money transfers outfit. The major hindrance to emergence and success of Mobile money transfer and Mobile payment will be Regulations. Regulations are not catching up with the speed of Innovations in the Mobile Arena in Africa.


The convergence of mobile services and financial services has now evolved into
three models which are, Mobile operator- agents model, Bank Operated model and Mobile operator - Bank model, in Africa.

Aside the licensing of Mobile money operators in Nigeria, the regulator should Endeavour to put in place a money laundering mechanism that will enable them monitor cross border transfer as such that the mobile is not used as a channel to abuse financial systems and circumvent National economic laws. This will help prevent future issues that will negatively affect this evolving system.

Third party Agent monitoring is also key as some models will require independent agents like the Mpesa Model in Kenya. There is need to closely monitor the level of involvement and how they carry out their businesses.

License cost is another area where the regulator will need to do a deep dive study. Some of the technology providers will not necessarily provision services to end users and that means they cannot be licensed but the operating partner can be licensed. Scope of their engagement and volume should also form the basis of such licensing regime since most of them might not be able to reach a National spread or cross border. Licensing cost may significantly inhibit the emergence of this sector if not properly matched

Lastly in mobile payment and transfer, the risk is inherently lower than normal traditional Banking and hence the level of regulation should be appropriate to the level of risk and not trying to adopt what presently obtains in normal traditional Banking to Mobile Money.

The time to proactively put in place a workable regulatory systems that will enable the ecosystem evolve into an African Model is now.

Emmanuel Okoegwale
NettleAfrica Telecommunications and policy Scholar.
emmanuel@gomobileng.com

The search is on for the Nigerian Mobileking!!!

As Mobile Operators roll out futuristic and Innovative Technologies
like the 3G,there had been no corresponding developments in the mobile
Value added services with real life Benefits.


Mobile Challenge is designed to be an annual mobile Value added
services competition to seek out the developers and entrepreneurs that
are creating new Value, new revenue and new innovative services for
the mobile workforce and mobile lifestyle in Nigeria .

M-Challenge will serve as the industry benchmark recognition status
for the selected few after meeting the rigorous technical and Business
evaluation criteria. The goal is to identify new opportunities and
build a sustainable mobile Value added ecosystem with real life benefits,
exportable potentials, recognize the dynamics of the market and gather
market information for mobile product portfolio decision making
process.

The contest will focus on m-Banking, m-Commerce, e-govt, infotainment
and Mobile marketing within the technology ranges of 2g to
3.5G.Educational institution, Mobile Vas content providers, content
aggregates, application developers, and non governmental organization
will be allowed to participate in proposal submission.The contest is
aimed at Pre commercial mobile services.

Visit www.mobilechallenge.org to know more.

Emmanuel Okoegwale
Mobile Marketing Specialist