Final assignment or Term project

IT & E-Business

Salim Sayouri

ENPC EXECUTIVE MBA

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IT & E-Business : Tawfik Jelassi Final assignment or Term project

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I (We) hereby declare that I (we) have neither given nor received unauthorized help on this assignment, that all work is my (our) own unless otherwise stated, and that all sources used in the preparation of this assignment have been properly cited.

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Salim SAYOURI
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Final assignment or Term project

IT & E-Business

Salim Sayouri

1. What lessons would you draw from the M-PESA case study? How relevant are these lessons for you personally and professionally?

From the M-PESA case study, personally I would like to highlight the Kenyan states role in preparing and promoting the basis and the ingredient of M-PESA product success. First by adopting early the Universal Service in Telecommunications which consists on providing the baseline of Telecommunications services to every resident in the country. Secondly by the flexibility of the Central Bank that allowed telecommunications providers to provide Mobile Payment solutions without being granted a formal agreement to offer financial services.

The Universal Service is a leverage of the State to promote Information and Communication Technologies (ICT) and therefore capitalize on it to improve the living qualities of financially poor people and drive the socio-economic development.

The role of the Kenyan state in these two decisions could be considered as a major reason on the success the M-PESA service.

From a professional point of view, M-PESA project was in the beginning a mean for Safaricom to enhance customer retention and the ARPU before appearing as a business opportunity and a customer unmet need. The usage-based business model elaborated by Safaricom around M-PESA tailored a financial service to the needs of the financially poor people at a country level. Millions of new customers, thanks to the mobile technology, traditionally not deserved by classical financial institutions are now addressed and generating a substantial profit from millions of small amounts of transaction but at high frequency.

The M-PESA service is a tangible case study on an efficiency combination of technologies and inclusive business innovation to generate momentous revenues on a deserted market.

Final assignment or Term project

IT & E-Business

Salim Sayouri

2. If you were Bob Collymore, the new CEO of Safaricom, which initiatives would you take to ensure the future success of M-PESA in Kenya?
I would recommend to Leveraging the virtual value chain: Market development: To continue investing in innovation and enhancement of the M-PESA solution: o To better compete in the internal market. 75% of urban dwellers are unbanked and are potential customers that can be seized by other competitors. o To broaden the service to neighbor countries with similar economic and cultural atmosphere. o To build a strategic partnerships with different financial institutions (Bank, Money Transfer companies (i.e. Western Union, MoneyGram) and Mobile Operators abroad where important Kenyan Diasporas are installed.

Product development: Introduce and enrich the M-PESA service with new features like: o o Cash collection, already provided by Safaricoms competitor, Zain. Airtime Transfer, in addition to Money Transfer, between Safaricoms subscribers.

Logistics: enhance distribution networks to balance the float between cash and e-value especially in the rural areas. This could be done by developing partnerships with different financial institutions and cash-in-transit companies to efficiently deliver agents with sufficient cash to answer the need.

Communication and brand development: continue developing on the brand strengthens and brand trust as they are major challenges for ensuring the M-PESA success.

Final assignment or Term project

IT & E-Business

Salim Sayouri

3. To what extent would a system such as M-PESA succeed in the country where you are based? Defend your arguments.
Mobile transfer service in particular and Mobile money globally are tacking off in many emerging countries as it presents a good alternative for providing additional value services to millions of financially excluded people. In developed countries, its more a new alternative for payment methods than a financial service enabler. The M-PESA success has not yet been reproduced, with the same brightness, in any other countries. However, and without hesitation we can guarantee that the Mobile Money has a bright future ahead of it in the next coming years.

In Morocco, my homeland, Maroc Telecom has launched, in early 2010, mobile payment services, Mobicash, cooperated with two mastodons of the financial institution in Morocco, Attijariwafa bank and Groupe Banque Populaire. The Mobicash service was provided by the operator distribution networks. The customers who subscribed for the Mobicash service could perform the following service, cash-in, cash-out, money transfer, Airtime account recharge and payment of bills and goods with reasonable fees1 ranging from USD 0.10 to USD 1.5 for a transferred amount between USD 0.10 to USD 300.

Nevertheless, the Mobicash didnt meet the same M-PESA success in Morocco and wasnt acclaimed as killer service among the financial poor people. The main reason for this short success still need to be revealed, but we could at least point out some defects in the strategy of the legacy operator, Maroc Telecom: o Marketing is more axed on consuming the airtime product; Mobicash is still viewed from the Operators communication as a negligible product compared to the voice product. o o Customer education: insubstantial communication campaign to ensure brand awareness. Distribution: the Mobicash distribution channel is based on well-established network on urban areas while its, almost, not existing in the rural areas2 where sustainable development of customer base should be axed. Also those later are more seen as a voice telephony shop rather a shop for a Value Added services including financial services.
1 2

http://www.iam.ma/Particuliers/Mobicash/Les-services/Transfert/Pages/Transfert-national.aspx http://www.iam.ma/agences/Pages/Agencelaplusproche.aspx

Final assignment or Term project

IT & E-Business

Salim Sayouri

In analogous way, Meditel, the second largest operator in Morocco, launched a mobile money service under the brand Mobile Banking and hadnt attained the M-PESA success, mostly for similar reasons that prevent its rival, Mobicash, to be highlighted among the success story of Mobile Money deployment.

In conclusion, strong marketing strategy, well-prepared customer education, flexible and pro-active regulatory environment coupled with efficient and strong distribution channels are, without doubt, the most ingredients of the M-PESA service success. Also we have to not forget the socio-economic situation of Kenya which facilitated the quick adoption of Mobile Payment services.