Lycamobile’s entry into the mobile money sector could potentially challenge the dominance of Airtel Uganda Mobile Commerce and MTN Uganda Mobile Money. The telco has applied for licenses to operate as a Payment Services Provider (PSP) and Payment Systems Operator (PSO), allowing it to issue electronic money and facilitate various financial transactions.
The regulatory process is ongoing, with the Bank of Uganda director of communication, Mr. Kenneth Egesa, stating that licenses will be issued upon the conclusion of the process. One of the conditions set by the central bank is for Lycamobile to have a two-million-strong subscriber base, a target the company claims to be on track to achieve.
Lycamobile aims to learn from the successes of other mobile money operators in East Africa and plans to offer an attractive package to remunerate agents. Currently, MTN and Airtel control over 90 percent of mobile money accounts in Uganda, but Lycamobile hopes to break their duopoly with a competitive strategy.
Despite challenges and market uncertainties, Lycamobile sees growth opportunities in Uganda’s Fintech market. Experts suggest that reconsidering the taxation policy on mobile money transactions could positively impact transaction volumes and benefit mobile money operators.
However, Lycamobile faces the task of meeting capital markets listing rules, requiring positive profits after tax in at least three of the last five accounting periods. The Uganda Communication Commission (UCC) also imposes a tight deadline for listing, with potential fines for non-compliance.
The telecom market in Uganda has witnessed exits, acquisitions, and mergers, with some companies facing financial challenges. Lycamobile’s move into mobile money is a strategic step to navigate the competitive landscape and provide a new avenue for growth.
