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Mobile money provides a winning strategy

How a telecom carrier spearheads the telebirr mobile money transformation of Ethiopia

By Frehiwot Tamru, CEO, Ethio Telecom

Ethio telecom, a pioneer and giant telecom service provider in Africa, has served Ethiopia for the last 129 years. As a leading brand with a customer base of 72 million, it has played an enabling role in the multifaceted development of the country. It is the second largest of the 195 telecom operators on the African continent, and the 21st largest of the 774 operators worldwide.

Broadening its business horizons by looking to digital finance, Ethio telecom launched its Mobile Money service under the brand name ‘telebirr’ in May 2021. A major focus was to address the financially excluded and underserved segment of Ethiopian society and bridge the gap in the country’s digitalization efforts.

The backbone of Ethiopia’s financial inclusion

Developed in collaboration with Huawei, telebirr is Ethiopia’s first operator-led mobile money platform. Its adoption rate is surprisingly high, with telebirr acquiring 36 million subscribers within just two years of its launch, while handling transactions worth more than 1 trillion Birr.

Since its launch, telebirr has grown significantly. It offers differentiated services from basic mobile wallet services to the enhanced mobile digital financial services such as micro credit, micro saving, over draft services, P2P, credit pay, and more. With just a mobile phone, people can make deposits, pay bills, send money to family and friends, remit money internationally, and even get instant micro-credit.

Especially noteworthy are telebirr’s mobile financial services: micro credit and micro saving services launched in August 2022 are playing crucial role in transforming the nation’s mobile finance and ensuring financial inclusion. In a year’s span, more than 2.7 million citizens were able to get micro loans worth 6 billion birr in total, while more than 880,000 customers saved over 5.2 billion birr.

Major milestones for telebirr

In addition to advancing financial inclusion, telebirr is fostering the digital transformation of the country. It is simplifying the lives of individuals, while enabling businesses and public enterprises to digitalize their services to increase their productivity and efficiency.

As a further innovation, telebirr recently upgraded to telebirr SuperApp, which provides access to multiple services through engaging mini-apps. It is integrated with multiple ecosystem players like government services, private companies, and the country’s start-ups so they can easily access and be accessed by the 36 million customers of telebirr. Online public services such as e-government services are now possible, enabling hassle-free cashless transactions for customers. People can now pay their taxes, utility bills, and other fees using their phones. The government recent move towards cashless payments for fuel transactions shows what a powerful and promising tool telebirr is.

Supporting this growing ecosystem, telebirr has 136 master agents, 110,000 agents, 60,000 merchants, and 23 banks working in tandem. With over 52 public and private institutions integrated into telebirr, it has emerged as the most interoperable mobile money platform in Ethiopia.

Telebirr’s winning strategy

Telebirr’s success stems from its extension network coverage across the country (99.1%), as well as from its large customer base of more than 72 million, its 300,000 point-of-presence through partners, and its distributors, retailers, franchisees and its own service centres.  The localized names assigned to the services and the commission-based structure for customers and agents have helped create widespread acceptance of telebirr. Aggressive social media campaigns and referral marketing programs such as cash back, cash for recharge, and other future transactions were launched.

Partnerships are a key success factor. There are a total of 521 major telebirr integrations. An integrator has been engaged to integrate merchant platforms across a wide network of retail and business partners, allowing customers in supermarkets, companies in entertainment and hospitality service, hospitals, pharmacies, and cafes to pay service charges using telebirr. 

Telebirr aspires to become a digital marketplace and the largest fintech platform supporting the digital economies of Ethiopia and Africa. Ethio telecom desires to facilitate the digitalization of industries such as education, agriculture, gaming, health, lifestyle, and more. At the same time, it aims to help telebirr evolve into a payment lifestyle brand that gives customers a one-stop shop for all of their financial service needs.

Challenges in implementation

While implementing telebirr, diverse sets of challenges were faced such as lack of digital literacy, regulatory challenges, and building a reliable agent network. Lack of awareness of the platform in low-income markets and rural areas prevented widespread adoption among merchants in those areas. It has built an agent structure by developing its existing airtime distribution channel. Ethio telecom owns more than 300,000 retail outlets and more than 500 shops across the country. Realizing their potential, it made its major airtime distributors as master agents with development of more flexible use cases and offerings which are attractive to the agents as well as the customers.

Ethio telecom is engaging with the National Bank of Ethiopia to address the regulatory challenges associated with mobile payments. For example, the transaction limit should be increased so customers get the flexibility to do more transactions with the convenience of a mobile connection. Integrating very small informal enterprises such as shoe-shiners and street vendors is another challenge because these businesses don’t fall under the purview of the country’s taxing or licensing codes.

Ethio telecom is working with all stakeholders to deal with these and other challenges. It is proving the power of telebirr in accelerating financial inclusion and realizing the full potential of Ethiopia’s digital economy.

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