Tanzanian Telcos to run their Mobile Money Services as Independent Entities


Telcos that operate mobile money services in Tanzania will now be issued with independent licenses, a move that will separate the mobile money business from the telephony business. The move by the government was stated as one aimed at securing customer interests.  According to the East African, the Bank of Tanzania issued the directive, which is set to come into effect in 2017.  The telcos were required to register new subsidiaries to run the operations by July 1st this year.

The directive by the Bankcame into effect following the enactment of two new laws which directly affect the subsector.  The new laws include the National Payment Systems Act, 2015 and the Electronic Transactions Act, 2015. These laws require any company that offer payment solutions but is not a bank or a financial institution create an independent entity to run the operations.

Tanzania currently has six telcos that offer mobile money solutions that include TigoPesa run by Tigo, Airtel Money by Airtel,  M-Pesa by Vodacom, Z-Money by Zantel, V-Money by Halotel and Smart Tanzania. These companies have 63 Million subscribers between them with 1/3 of them active according to The Eastern African. Tanzania has also managed to achieve a first with the services by making them all interoperable. This means customers can send money between these services.

Locally, Airtel Kenya has sought the separation of Safaricom’s telco business with its mobile money service M-Pesa. The firm pursued this angle through by seeking to have legislation enacted which would declare Safaricom the dominate player in this market segment which would the  force a splitting of its business into different entities.