Equitel’s MVNO launch with Effortel and Airtel shows that despite operator consolidation, more competition is on the way
As if mobile operators did not have enough to worry about – with falling revenues and getting to grips with a data world – along comes the prospect of MVNOs. Equity Bank’s recent launch of Equitel is the stuff of nightmares: a respected retail brand outside telecoms creates an MVNO that has already got more than a million activations. Russell Southwood talks to Liudvikas Andriulis, CMO of Effortel, the company that provided the underlying operational platform.
Equity Bank started over three years ago to think about making some kind of play in the telecoms space. Once it had narrowed its options down to the idea of an MVNO, it saw a number of different providers and settled on working with Effortel.
We interviewed Effortel’s CEO Arkadi Panitch back in September 2009 when he was first scouting out opportunities in Africa. ( see Balancing Act Newsletter issue 470) Since then he has expanded his company so that its centralized real-time IN system is currently integrated with 6 mobile operators across 7 countries (Belgium, Italy, Oman, Poland, Taiwan, Malta and Kenya) and 3 continents.
It runs a Carrefour MVNO in three countries , as well as providing MVNE services to Globe in Italy, Equitel in Kenya, Vodafone and Total Erg in Italy, Vodafone Malta in Malta, and Bakcell in Azerbaijan. It is also a consultant to Tier-1 clients such as Israel Post, Alon Group (Israel), Globe (Philippines) and Eagle Mobile (Albania).
MVNO deals of this kind usually require three different people to make them work: a non-telecoms player with high profile retail presence or a telco wanting to reach a niche (typically diaspora populations); a mobile network willing to host the MVNO; and Effortel which usually enables the network operations with its centralized real-time IN system.
In the case of Equitel, the scale of the operation is such that it has helped set up a local IN system:”It’s a copy of what we have in our operations headquarters in Brussels. The location of the hardware is to take care of the scale of the operation.”
The mobile network provider is Airtel, the number two player in the Kenyan market. Since it took over Zain, Airtel has tried its level best with a price lowering strategy to take a bite out of dominant player Safaricom’s market share. The dial barely moved so this kind of MVNO deal with a local brand must have been extremely attractive. The non-telecoms retail brand was Equity Bank that has made a name for itself innovating in the East African banking space, particularly in terms of mortgages.
Equitel has three services: My Money, My Phone and My Life. The latter is something that’s not unlike Facebook’s Internet.org offering. It offers free access to the customer to Wikipedia and things like medical services, homework help and assistance for pregnant mothers (Mama). As Andriulis told me:”Equitel’s very clear that it’s not just trying to make money but it also wants to improve lives.”
The My Money function allows customers to check balance updates; and make payments and withdraw money from ATMs without a debit card – the customer enters a PIN code sent to their phone via USSD.
Andriulis added: “Equity Bank recognised that the limited infrastructure of banking institutions in East Africa, along with this ground swell in mobile was driving the mobile banking phenomenon. The majority of people wanted more from the mobile banking experience than simply the wire transfer functionality offered by typical mobile wallet services”.
So how does Effortel see possible expansion prospects in Africa?:”If Equity Bank decides to expand, it can offer mobile banking services to other countries where they have a footprint. Since the Equitel launch, we’ve had a lot of enquires from business conglomerates, retail companies and ISPs.”
Mobile operators might have thought to themselves that the voice space would get easier as markets consolidated. MVNOs show that competition will continue even if the number of players shrinks.
For more information and contact details, visit Effortel at www.Effortel.com
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Angel Investing Events in Key Markets look set to fill some of the equity and mentoring gaps in Africa
Separating Hype from Reality in the Fizzy World of Africa Start-Ups – VC4Africa survey findings
Education entrepreneur Obinna Ukwuani, Exposure Robotics’ plans to launch the first African STEM secondary school in Nigeria
Videos interviews to watch:
Katrin Macmillan on an outdoor Internet facility in Nigeria based on Sugata Mitra's ideas
Iono.fm's Ryan Dingley on his online audio radio start-up and its pan-African expansion plans
Sacha Poingnonnec, Africa Internet Group on the challenges of running an online business in Africa
Felix Kimaru, Totohealth on empowering mothers with health information via SMS on their mobile
Fernando de Sousa, Microsoft on what the business model is for TV White Spaces in Africa
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