Equity takes on Safaricom with free money transfer

From left: Airtel Africa CEO Christian De Faria, Equity Group CEO James Mwangi, Chief Officer – Finance, Innovation and Payments John Staley and Finserve Africa Ltd Chairman John Waweru during the launch. [Photo: Courtesy]

Mobile phone subscribers in Kenya stand to win big after Equity Group Holdings Limited (EGHL) officially launched Equitel, which it said will offer free money transfer, voice and data services.

Through the new Mobile Virtual Network, Equitel, Equity will provide voice calls at a standard Sh4 across all networks and Sh1 for SMSs, setting the stage for a price war among mobile service providers in the country.

The firm’s CEO James Mwangi said the bank would remain active in providing banking services to its consumers even as it ventures into the country’s telecommunications sector, currently dominated by Safaricom.

“We will be riding on the infrastructure agreement with Airtel to provide the services through Equitel, but we remain committed to provide banking services, which is our core business, to our consumers,” he said during the unveiling of the new platform in Nairobi.

Equitel will facilitate the provision of both banking and telcom services and offer free money transfer.

The entry by Equity into the voice and data segment is an affront on market leader Safaricom, which has over the years enjoyed a comfortable lead in the telecommunications industry. Safaricom last year posted more than Sh21.1 billion in pretax profits with a bulk of the income generated from M-pesa and data services.

More resources

On its part, Airtel, which stands to earn millions in revenue from commissions on transactions made through Equitel said it had made upgrades on its network and is planning to make more resources available to handle the anticipated upsurge of traffic.

“We have 189 towers that have already been set up to strengthen our network in the last one year to ensure that coverage is strong and we are planning to invest an additional Sh19 billion to upgrade our infrastructure to boost our network’s capacity,” stated  Airtel Africa CEO Christian de Faria.

Safaricom CEO Bob Collymore welcomed the launch, saying, “It is a true indicator of the free and robust operating environment we have in Kenya.”

“We are encouraged that the growth of the mobile sector has progressed to enable new players to launch competitive propositions that benefit their consumers.”

He said the integrated communications provider will continue to invest and offer relevant products to its customers. He added that Safaricom would remain dedicated to deliver on its promise to customers with both speed and consistency.

-Additional reporting by Jackson Okoth