Vodacom and Airtel reported growth in January and February after fees returned, and Kinshasa named a digital minister.

By Kanisa Magazine · April 2021

Congo’s mobile-money market entered April 2021 on a different footing from a year earlier. The pandemic-era waiver on fees for person-to-person transfers had ended, customer bases were still growing, and a new government had put digital technology on its priority list.

The evidence is in the operators’ own reports. Vodacom told analysts on 2 February that the DRC began charging again for person-to-person M-Pesa transfers in January, after Mozambique had done so in October. Airtel Africa’s results of 29 January showed its mobile-money customer base across a group of Francophone markets that includes the DRC up 32.3 per cent.

This is a market that has stopped paying for its growth with free transfers and is now paying for it with fees.

What the waiver bought and cost

Free transfers raised usage across the group while they cut revenue growth.

Vodacom’s call transcript is explicit about the trade. Across its international markets active M-Pesa customers rose 7.7 per cent to 16 million, 47 per cent of the international base. M-Pesa revenue grew 10.1 per cent in the December quarter. On a normalised basis the growth was 7.8 per cent, compared with a fall of 1.4 per cent in the first half, which the company attributed to the free person-to-person period.

The operators had spent months buying behaviour: more wallets, more transfers, more habit. January was the point at which the bill came due for users, and the first test of whether the habit held.

Where the revenue comes from

Transfer fees, cash-out charges and airtime purchases fund the network of agents.

A mobile wallet earns on small margins across many transactions. The customer pays on sending, on withdrawing cash at an agent, or on paying for airtime. The agent earns a share, and the operator keeps the rest to cover licences, float and the platform. When transfers are free, one source of income disappears while agent costs stay.

The pressure is on volume. That is why Airtel Africa’s January results matter. Francophone segment revenue rose 18.9 per cent in the December quarter in reported currency and 15.0 per cent at constant exchange rates, with the DRC named among the countries that grew. The mobile-money base reached 3.6 million across the segment.

Why the dollar still sits behind the wallet

In a dollarised economy, a wallet is a way to hold and move foreign currency, not only francs.

The wallet’s economics depend on the currency it carries. Press coverage of the BCC’s April rate cut gave the scale of dollar use: roughly 85 per cent of bank deposits and 70 per cent of money supply, with the central bank directly controlling only a tenth of cash in circulation. A wallet that holds dollars reaches people the banking system does not.

That also makes the exchange rate a design factor. The BCC digest of 29 April shows the indicative rate at CDF 1,988.07 per dollar, only 0.8 per cent weaker than at the end of December. A stable franc lowers the cost of holding balances in local currency and makes fee-bearing transfers easier to accept.

The public sector arrives

A government that lists digital technology as a priority becomes both regulator and customer.

The Sama Lukonde cabinet was published on 12 April. Augustin Kibassa Maliba took Posts and Telecommunications, and digital technology appeared among the priorities listed alongside security, health, education and infrastructure. Nicolas Kazadi took Finance.

That creates two openings. The state can route payroll, tax and fees through wallets, which would add volume without extra subsidy. And a minister with a clear brief can set the pace of telecom and payments rules that operators plan around.

What a business should do with this

Accept wallet payments now, and price them in, rather than waiting for the wave to peak.

A merchant, distributor or utility collecting from small customers should add wallet acceptance and decide who bears the fee. Pass it through where margins are thin; absorb it where the wallet replaces cash handling, which carries its own cost of theft and counting. Agents and suppliers who sell airtime or bundles should negotiate commission terms now, before the next round of fee changes.

The measure to follow through 2021 is simple: whether customer counts keep rising after fees returned. If they do, the market has moved from a subsidy to a business.