Telkom Kenya has shut down almost 90 per cent of its mobile money agent network T-Kash.
The move follows a fresh push by the telco to revamp its fintech unit in a challenging market environment, even as it admitted several missteps.
According to the latest industry data from the Communications Authority of Kenya (CA), the third-largest mobile operator in the country shut down 24,946 of its existing 28,106 T-Kash agents at the end of last year.
This as the telco registered a 30 per cent drop in mobile money subscribers from 27,837 to 19,607, bringing its share of the lucrative market segment to 0.06 per cent.
Telkom Kenya said it had scaled down its mobile money agent network after evaluating the business and in the face of several challenges.
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“At the launch of T-Kash, Telkom embarked on an aggressive agent recruitment drive to complement the desired push of our Mobile Financial Services (MFS) platform,” said the company in a statement.
“With time, and through continuous review coupled with prevailing market forces and ongoing regulatory challenges at the time, we noted that we had a number of inactive and non- performing agents.”
Telkom said it is now "ramping up its agent numbers, armed with a more robust vetting system in place and cognizant of past learnings.”
T-Kash was launched in March 2018 following a revamp of Telkom Money. Users can withdraw money from an agent or make payments using a one-off code instead of the customary agent and till numbers, which could have made the product less attractive to customers.
“We spoke to our customers and the feedback we got was users want choice and reliability,” said Director for Mobile Financial Services Anuj Tanna at the time.
Before suspending its services to rebrand, Telkom Money was the third-largest mobile money service, with 3.6 million subscribers and transacted Sh4.3 billion during its peak in the second quarter of the 2015-16 financial year.
The move comes at a time when Telkom Kenya is in merger discussions with Airtel Kenya.
The merger has, however, faced several challenges, including a protest by market leader Safaricom that is seeking more than Sh1 billion in debts. Telkom Kenya says the merger discussions are still ongoing although it could not give an expected completion date.