How really is Telkom’s T-Kash different from ubiquitous, evolving M-PESA? And how is it different from struggling Airtel Money? And is M-PESA really the problem? I don’t think so.

So Telkom Kenya wants a piece of the ‘mobile money’ pie with T-kash. That pie is so near, yet so far. And, if approached in the traditional sales manner, the pie will remain in the sky. Here’s why.

CEO’s speech at Telkom’s T-Kash launch

To begin with, in his speech at the grand launch, the CEO Aldo Mareuse was upbeat. Looking at the big blue ocean he told of untold opportunities for T-Kash: “95% of all money transactions in Kenya are still cash based.”

True. It’s also true that the peculiar Kenyan is fully aware of M-PESA and ecstatic about the user-experience and convenience, but still chooses to transact in cash.  Offering T-Kash, MobiKash, Tangaza Pesa and, now defunct Yu Cash as alternatives will not be hungrily lapped up as say, cell phones were, to Telkom’s landline. It’s much more complicated.

MPESA is not a service, it’s a way of life, a behaviour

As Airtel Money (with Airtel’s global might behind it) has proved, even giving money transfer services for free does not magically shore up your numbers. Just like you likely use Windows but browse with Google not Microsoft’s Bing. M-PESA isn’t a service any more. It’s a way of life for over half of Kenya’s population. It’s why we casually say, “I’ll m-pesa (send) you the money”, and get irritated with the response, “I don’t have M-PESA”. Taking M-PESA head-on is taking a culture head-on. You lose.

Chairman’s speech at launch

Which is why Telkom’s Chairman, Eddy Njoroge, was more cautious. “Unless the playing field is levelled, small players will close shop.”  Again, it’s not that straight-forward in today’s new normal.

Innovation precedes regulation: Microsoft case study

The ‘ innovation precedes regulation’ catchphrase was triggered twenty years ago.

In 1998 the US government was under intense pressure to break Microsoft’s (Windows 98) monopoly. BBC reported that a disappointed Microsoft founder, Bill Gates retorted: “A proposal to bundle Netscape’s Communicator browser with Windows is like telling Coca-Cola to sell three cans of Pepsi in each six pack. This is a step backwards for America, consumers and for the PC Industry that is leading our nation’s economy into the 21st century.”

Safaricom and Microsoft are 21st Century businesses

Time proved him right.

The Internet became prevalent shortly thereafter and innovations exploded. Forward thinking regulators push and pull with disruptive brands (like Uber) but do not tinker with them. That M-PESA is in existence today, is more an accolade to a progressive central bank (desirous of increased financial inclusivity and penetration) than Safaricom’s innovativeness.

Innovation is not just another app. I think, like Equitel, Telkom should consider a flank (not head-on) attack. The problem is not simply dominance. It’s an unprecedentedly empowered customer, the rapidly changing times we live in and the disruptive way of thinking that’s required to survive in them.

Today, that regulator is challenging banks (read, financial sector players) to change their business models to the new normal because, as he says, “innovation is not just another app”.

Remember the Communications Authority of Kenya? It switched off giant TV station incumbents who had refused to switch to the new digital normal. Will regulatory intervention help Telkom, let alone Telkom’s T-Kash? I wish them (Telkom) luck.

And just when you thought Safaricom is the problem, it isn’t.

What happens when apps that allow one to transfer money while one chats come to being in Kenya? Like China’s WeChat, which is already in South Africa

I think, like Equitel, Telkom should consider a flank (not head-on) attack. The problem is not simply dominance. It’s firstly, an unprecedentedly empowered customer, secondly, the rapidly changing times we live in, and finally, the disruptive way of thinking that’s required to survive in them.

What do you think?

You may also want to read, “Are Kenyan banks too big to fail?”


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