MTN Mobile Money Helps Revolutionise Money Transfer

Few Ugandans have access to a bank branch or an ATM. But most do have a cellphone within easy reach - and this reality is driving the world's fastest-growing mobile payments service, MTN's Mobile Money.
Launched in March 2009, the service has attracted 890 000 MTN subscribers, says MTN Uganda's head of mobile money, Richard Mwami. The number of users will hit 2m by year-end and 3,5m - more than one in six MTN Uganda subscribers - by 2012, he predicts.

MTN's benchmark is UK mobile network operator Vodafone's M-Pesa service, offered by Kenyan operator Safaricom. With 9,5m users - 40% of Kenya's adult population - M-Pesa is described by GSM Association, the global mobile network operator body, as the world's most successful mobile payments service.

After one year, adoption of MTN Uganda's payments service exceeds that of M-Pesa at the same stage, says Reg Swart, senior vice-president of Cape Town-based Fundamo, technology supplier to MTN's project. Over US300m in transactions have already been processed, he adds.

A key factor in the Uganda success is marketing through 2500 representatives, says Mwami. Direct contact and educating subscribers are critical to growing the service. Also vital is easy access to cash remitted to users, or enabling them to convert cash into e-money, he says. This is achieved through agents such as village shop owners. Mwami says it is "a good proposition" for agents. He explains they earn commission on transactions and receive liquidity management assistance from MTN's banking partner, Standard Bank's Stanbic Bank Uganda unit.

Warid Uganda In Tax Dispute

THE Commercial Court in Kampala has stopped the Uganda Revenue Authority (URA) from collecting over sh160m and enforcing other tax collections from Warid Telecoms, pending the final determination of its main suit.

This followed an application by the lawyers representing Warid Telecoms. The telecom company is disputing URA's orders to Stanbic Bank to pay sh160,918,869 in taxes.

Justice Geoffrey Kiryabwire of the Commercial Court also ordered the parties to carry out a reconciliation exercise to determine if any taxes were due and payable to the URA and report back to him on August 26.

Warid also sued the URA's Commissioner of Customs for wrongly taxing its duty-free machinery. The firm also asked the court to compel URA to refund with interest a total of sh172,389,883, which it claimed the tax body forcefully paid itself from the company's general purposes bank account.

Warid was referred to as one of the largest investors in Uganda having invested over $200m (over sh400b) in foreign direct investments.

The company further seeks general and punitive or exemplary damages for what it described as URA's illegal and wanton acts that are damaging its operations.

The company told Justice Kiryabwire that the Commissioner of Customs willfully and unlawfully imposed tax on palisade fencing that is part of its telecommunications plant and machinery, which is exempt from import duty.

Warid also asked the court to permanently stop URA from enforcing the "third party agency notice" that requires its bankers to pay taxes on its (Warid's) plant and machinery or any other enforcement measures against it.

The court was told that between September and October 2007, the finance ministry, granted investment incentives to Warid that its plant and machinery was to be imported free of any duty under the investment incentives by the ministry and the East African Customs Union Common External Tariff.

The court heard that the Commissioner of Customs had accepted a list of WARID items to be imported.

Safaricom Plans to Borrow R 1.2 billion

Kenya's biggest mobile operator wants to borrow between up to R 1.2 billion. It has picked Barclays Capital, Absa Bank and Stanbic to arrange the issue.

Safaricom, which is partially held by Britain's Vodafone has had to contend with falling revenue per user as it has entered a price war with rivals such as France's Orange and Kuwait's Zain.

Barclays Bank Kenya has already launched a 5 billion shillings seven-year bond to support long-term lending.

Investors gave it 3 billion shillings in