Saturday, February 20, 2010

Vodafone prove mPesa repeatability

One of the most important discussion points regarding transformational banking at the recent MWC slipped away almost un-noticed. This was a very important inflection point in the industry and very few (if any) commentators picked up on this.

The success of the mPesa deployment in Kenya has been discussed and referenced many times. We all acknowledge the groundbreaking work that was done by Safaricom in this regard. Yet, there was the concern that this was a once-off; a freak of the special circumstances of Kenya. Some observers commented to me that it is unlikely that the success of m-Pesa will be repeated. This placed a damper on other roll-outs as no-body was sure what was the reason for the phenomenal success in Kenya.

This is why, I believe, that the success that Vodafone (through its subsidiary Vodacom) achieved in Tanzania is so important. It was reported that more than a million subscribers have signed up on the service (Read here), but indications at the Congress were that this number has now more than doubled. The fact that Vodafone has demonstrated that they can duplicate the success of mPesa in other countries, is of significant importance. This means that the Kenya experience was not a fluke, and that Vodafone has learned what it takes to make these roll-outs work. It is likely that they now have a recipe and can replicate this more easily in other countries.

This is a major risk for other Operators that are not ready to respond, as it seems that it took quite some time for Vodafone to get it right in Tanzania. They had the benefit of experience. Just think how long it will take if you start from scratch...

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