Can Airtel Money Compete with M-PESA in Kenya?

credit: Nicola_K_photos

M-PESA has had a stronghold on the money transfer business in Kenya for the last 10 years. This is due to the fact that the M-PESA network is a large, direct personal utility network sitting on top of large personal utility GSM network. I wrote about this here.

The Mobile Subscription Market Share.

According to the Communication Authority of Kenya Sector Statistics Report Q1, 2020 -2021 Safaricom PLC had 64.2% mobile subscriptions market share against Airtel’s 26.8%. This translates to 38,144,413 subscribers for Safaricom PLC compared to Airtel Kenya’s 16,267,392.

Source: Communication Authority of Kenya

If you go back in time and look at Q1, 2016 -2017 of the same report, Safaricom PLC had a market share of 69% mobile subscriptions against Airtel’s 17.5%. Which translates to 26,611,082 subscribers for Safaricom PLC against Airtel Kenya’s 6,767,665.

Source: Communication Authority of Kenya

Airtel Kenya GSM Business Is Catching Up;

What is notable is that between Q1, 2016–2017 and Q1, 2020–2021, Airtel Kenya has been closing the gap in terms of GSM network growth. The gap was 3.9 X larger in favour of Safaricom PLC back in Q1 2016–2017. This has shrunk to 2.3 X in Q1, 2020–2021.

Airtel Money Service Is Practically Non-Existent.

If you look at the numbers of the same report, the Airtel’s GSM growth in market share doesn’t translate to mobile money market share. Safaricom PLC had 31,417,232 active mobile money subscribers to Airtel Money’s paltry 341,306 in Q1 2020–2021. M-PESA network is 92 X bigger.

This is a big problem for Airtel Kenya.

Source: Communication Authority of Kenya

How Can Airtel Money Change This Narrative?

Airtel Kenya has a decent GSM customer base of 16M customers, and in my view, this is a large enough network to have a sizeable Airtel money network. This is a tough question Airtel Kenya must ponder every day.

I will try to give my point of view.

Network Effects.

James Currier from has stated that “Network effects are one of the four remaining defensibilities in the digital age, including brand, embedding, and scale.”

Network Effects occur when every new user adds value in your product to other users who will use the product. The more users you get, the more valuable your product gets. Simply put, user number 1,000 adds value to user number 1.

Ideal Customer Journey

M-PESA today is a dense direct personal utility network. To challenge this position, Airtel Money will need to create a network effects playbook that turns the mobile money practice within telecommunications companies on its head.

Traditionally, the GSM business in telecommunication companies is core. This is the reason for their existence. As such products that are not part of the GSM offer are seen as value-added services (VAS), mobile money included.

With the success of M-PESA and mobile money offerings at large, this narrative is changing slowly. telecommunication companies have started to lay more emphasis on Fintech services which they hope will diversify revenues as the GSM business comes under pressure mainly due to OTT services like WhatsApp, Zoom, Telegram etc. that are changing the way we communicate.

The VAS approach which is common to all telecommunication companies means that customers need to first join the GSM network so that they can join the mobile money offering. This is true for Airtel Kenya. See diagram below;

Ideal Customer journey

The Reality For Airtel Kenya.

The problem with this approach especially in Kenya is that there is a bigger mobile money network in the country, M-PESA. As such almost all Airtel Kenya GSM customer’s will need a Safaricom PLC sim card so that they can send, receive and withdraw cash on M-PESA. This has the effect of strengthening the Safaricom PLC network even more. See illustrations below;

Current Customer Journey

Solving The Problem By Unbundling.

The approach I propose here is somewhat counter-intuitive to a Telco mind, however, seen through the lenses of Network Effects, its a viable approach that should be considered.

This approach challenges the artificial boundaries that exist between telecommunications operators networks in designing and monetising a ubiquitous financial service offering. See the diagram below;

Stand-alone Telecommunication Networks

To grow the mobile money business, Airtel needs to unbundle Airtel money service from Airtel GSM business.

What does this mean?

Airtel should propose financial services offerings to all Kenyans regardless of the network they are subscribed to. This can be done by positioning Airtel money, not as a money transfer or payments platform for Airtel customers only, but as a wholesome OPEN platform offering financial services and lifestyle solutions to all Kenyans.

If you think about it, all tech giants do this all time. WhatsApp, Facebook, Twitter, even banking services from your local bank take this approach. This approach drops the artificial boundaries discussed above and takes away the Airtel GSM network constraint form the equation.

This means Airtel Kenya has to reconfigure its business under a new Virtuous Cycle by being an Over The Top (OTT) player.

New Virtuous Cycle

The new virtuous cycle that comes into play looks to the OTT financial service network as a source for GSM network business growth. Consider the two diagrams below;

New Virtuous Cycle
Proposed Airtel Money Network Sitting on top of all Telecommunications Networks


A ubiquitous financial services network will cast its net on top of other competing networks. Sitting on top of these competitor networks as an OTT player provides Airtel money significant advantages. Some of these are;

  1. It drops the barrier for Customers. A Customer does not have to switch their sim card to subscribe to the Airtel money service. Switching sim cards and consequently, one’s phone number is more often than not a hard sell. Mobile numbers are embedded in the fabric of one’s digital life.
  2. Operating as an OTT player allows Airtel to leverage data harvested from consumer phones and analytics thereof (to be done with content and in compliance with privacy laws) to access behavioural data points on customer consumption patterns of competing services.
  3. Having access to these consumption patterns will allow Airtel to be more accurate in crafting GSM offers to Airtel money customers who do not have an Airtel sim card. Having access to a customers airtime and data consumption habits of the competitor services allows for the crafting of hyper customised instant offers to these customers.
  4. As an OTT player, Airtel will have an automated marketing channel to serve the hyper customised instant offers to the customer every time they top up on airtime or data from the competing networks.
  5. Airtel will also have a more accurate way of measuring conversion from the financial services network to GSM network. Having the ability to measure attribution will optimise the utilisation of marketing dollars.

This approach is counter-intuitive to the core GSM business and needs some pondering by Airtel Kenya.

However with the market leader being 92 X bigger, what's there to lose?


These are my humble observations. I don't have any knowledge on Airtel Kenya strategies and as such my views may be biased. My proposal may also not make sense to Airtel Kenya.

The opinions presented here are strictly my own and do not represent those of my employer.



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digital money design.

digital money design.

Fintech, Banking, Financial Services, Decentralised Finance, Technology.....