Telkom Kenya and mobile phone service provider Orange are putting on hold plans to introduce a money transfer service, Kenya's Daily Nation reports.
This may have been occasioned by the stand off between the Central Bank of Kenya (CBK) and a commercial bank involved in the Zain Kenya money banking service which is sending out confusing signals to the market.
Zain Kenya had initially hoped to launch its money transfer service known as zap this month but is yet to get prerequisite approval.
Zain and Standard Chartered Bank were due to meet the CBK yesterday with the hope of striking a deal.
Orange is the mobile brand of Telkom Kenya.
Orange head of marketing and strategy Jean-Michel Chanut said they were exercising caution with the plan.
“We will certainly comply with the market trends of providing money transfer services but currently, that direction is confusing,” said Mr Chanut.
“We all know what is going on at the moment with another player’s proposals for the same,” he added.
“We are exercising caution at the moment, we know our subscribers would want us to bring the service but not just now,” he said.
He spoke on Thursday during the launch of ring back tone service on Orange mobile that allows callers to the network to listen to downloaded music instead of the regular ringing tones.
Telkom Kenya just before its commercial launch last September had indicated that introduction of a money transfer service was one of the directions it would take for value addition to subscribers.
According to information it gave out then, the firm was to launch this by the end of this month.
Zain Kenya has been having a war of words with the Central Bank of Kenya over a delay in approving a similar service that they intend to launch, not only in Kenya, but in the East Africa region as well. "We will certainly comply with the market trends of providing money transfer services, but currently that direction is confusing," said Chanut
Zain together with Standard Chartered Bank was supposed to meet the CBK on 28 January hoping to reach a deal on its licence. Safaricom's M-Pesa money transfer service, which was launched in March 2007 and has dominated the market, caused an uproar from players in the banking sector, as it specifically targeted people who had no access to formal financial services.
The bankers and even some government officials have called for the regulation of M-Pesa and other subsequent services. Chanut also revealed that the company is nearing 500,000 active subscribers on the Orange mobile network.
The company's GSM network is already in 21 major towns across the country, barely four months after the launch, and plans are underway to expand into more areas using the Orange Fixed Plus and Telkom Fixed services.