Africa’s Top Telcos Scramble
September 23rd-27th, 2024
African Telcos Brace for Competition as Starlink Expands Across the Continent
African telecommunications companies face a new competitive landscape as Starlink, Elon Musk's satellite internet service, rapidly expands its footprint across the continent. Offering high-speed internet, especially in remote areas, Starlink’s presence is sparking reactions from major telecoms like Kenya's Safaricom, which has responded by doubling its fibre internet speeds and becoming the first in the country to offer gigabit speeds.
Starlink’s entry into Kenya in July 2023 saw it sign up over 4,000 customers in just a year, with offerings such as 200 Mbps for KES 6.5K (USD 50.00) and a 50 GB package for KES 1.3K (USD 10.00), significantly undercutting local providers. Safaricom, in turn, has upgraded its speeds and petitioned regulators to introduce stricter rules for satellite providers like Starlink, emphasizing the need for partnerships with local operators and concerns about accountability.
This competitive dynamic is not limited to Kenya. Telecom operators in Zimbabwe, Nigeria, and Cameroon have expressed similar concerns over Starlink’s ability to operate without building out the physical infrastructure that traditional networks require. In Nigeria, Starlink has quickly become the third-largest dedicated internet provider, while in Zimbabwe, ISPs like Liquid Home have responded by slashing prices.
As Starlink expands, competition between satellite internet providers and traditional telcos intensifies, reshaping Africa’s telecom landscape. While Starlink’s appeal lies in its ability to serve remote areas and bypass infrastructure constraints, telcos are adopting new strategies, such as enhanced service bundles and fibre speed upgrades, to retain their market share. This evolving scenario underscores the need for innovation and regulatory clarity as Africa’s internet connectivity sector experiences rapid transformation.
African Fintechs Rethink Debit Card Offerings Amid Operational Challenges
In recent years, many of Africa’s fintech startups embraced debit cards as a natural extension of their mission to broaden financial access. Partnering with global payment giants like Visa and Mastercard, they aimed to issue virtual and physical cards to enable seamless online transactions. However, the tide has shifted, with several fintechs discontinuing or rethinking these services due to rising operational costs and exchange rate volatility.
The latest fintech to pivot is Nigerian investment startup Rise, which announced it would end its virtual card services by September 30, 2024, citing fluctuating exchange rates, unreliable card providers, and increased costs. This follows similar moves by other fintechs like Carbon, which halted its debit card operations earlier this year due to unsustainable operational costs tied to dollar-denominated expenses.
For many fintechs, the economics of running card services in Africa have become challenging. High chargeback rates, transaction fees, and currency fluctuations have made it difficult for startups to sustain these offerings. For instance, Carbon’s co-founder, Ngozi Dozie, questioned whether issuing cards made sense for fintechs, especially given the competitive landscape and the fixed costs of operating card services.
Other fintechs, such as Payday and Union54, have taken measures to mitigate losses, including stricter policies on declined transactions and halting virtual card services altogether. Meanwhile, those still offering cards, like Kuda and Moniepoint, are exploring local alternatives like Verve to avoid the costs associated with global schemes.
As more fintechs pivot away from debit cards, they focus on long-term sustainability and core products offering more value. This strategic shift reflects broader challenges within the fintech space, where operational costs, fraud risks, and currency volatility have prompted a reevaluation of business models.
Nigerian On-Demand Services Struggle Amid Rising Fuel Costs
Nigeria’s on-demand services industry, including ride-hailing, last-mile delivery, and food delivery, is grappling with the impact of a significant fuel price hike. Triggered by the Nigerian National Petroleum Company’s (NNPC) decision to raise the price of Premium Motor Spirit (PMS) by 40%, the cost of fuel has surged to as much as NGN 1K per litre in some areas, drastically increasing operational expenses for businesses reliant on road transport.
The fuel price hike, which has more than quintupled since President Bola Tinubu's reforms in May 2023, has placed immense strain on ride-hailing drivers, food delivery riders, and last-mile logistics companies, who are struggling to balance operational costs and customer pricing.
To cope with these rising costs, some startups are exploring longer-term solutions such as electric vehicles. For example, Ibadan-based HeyFood is considering transitioning to electric bikes, though this shift is complicated by riders still paying off petrol-powered bikes.
Overall, the Nigerian fuel hike is squeezing on-demand services, forcing businesses to balance rising operational costs with customer retention. As sectors explore incentives and potential operational shifts, the industry remains under high pressure, with ongoing tensions between service providers and workers over fare adjustments and commissions.
Latin American Fintechs Expand into Africa Amid Growing Digital Economy
Latin American fintech companies are increasingly entering the African market, attracted by the continent's expanding digital economy and financial access gaps. PayRetailers, a payment processor from Latin America, has recently expanded into eight African countries, including South Africa and Nigeria, aiming to provide cross-border payment solutions for underbanked populations. This move builds on its initial launch in Rwanda, Zambia, Uganda, and Tanzania three months prior.
Other Latin American fintechs like Brazil-based EBANX, Uruguayan dLocal, and Colombian Minka have also entered African markets, citing similarities between the two regions, such as financial exclusion and a reliance on cash transactions. These companies aim to leverage their experience with fragmented payment systems to support Africa's growing digital commerce sector.
Africa presents significant opportunities, with its e-commerce market growing at 8.2% annually—the highest rate globally—and digital payment penetration below 40%. Latin American fintechs are focusing on enabling global merchants to accept local payment methods like M-Pesa, Airtel Money, and MTN MoMo.
However, they face competition from established African fintechs like Flutterwave and Paystack, which have strong local knowledge and networks. Flutterwave operates in over 30 African countries and recently surpassed USD 3 B in annual transaction volume, while Paystack was acquired by Stripe for USD 200 M in 2020.
Success for the Latin American firms will depend on their ability to navigate Africa's complex payment infrastructure and adapt to local market conditions. As competition intensifies, they will need to offer flexible solutions that meet the diverse needs of African markets to contribute effectively to the continent's evolving digital payments landscape.
read our premium article: Latin American Fintechs Storm Africa In Fiery Digital Gold Rush
Network International Expands into Morocco to Drive Payment Digitalization
Network International, a digital payments company serving the Middle East and Africa, has officially expanded into Morocco, marking a key step in its growth strategy across Francophone Africa. The move is aimed at accelerating the digitalization of payments in Morocco, a key hub for regional commerce.
By leveraging local talent and advanced technology, the company aims to enhance Morocco’s financial ecosystem, making payments more accessible and inclusive. With major events like the 2025 Africa Cup of Nations and the 2030 FIFA World Cup expected to drive economic activity, the Moroccan payments sector is poised for significant growth.
The company plans to collaborate with local banks, fintechs, and merchants to simplify commerce and improve payment solutions, aligning with its mission to meet evolving market needs.
SunCulture Partners with Kenya's National Irrigation Authority to Boost Sustainable Farming
Kenyan climate tech startup SunCulture has announced a strategic partnership with the National Irrigation Authority (NIA) to promote sustainable irrigation solutions for Kenyan farmers. The collaboration aims to increase farmers' yields and profits, contributing to national food security through eco-friendly farming practices.
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SunCulture and NIA will implement on-the-ground activities across Kenya, offering hands-on training, demonstrations, and personalized support to ensure farmers understand and adopt sustainable irrigation methods. Currently, the two organizations are participating in the Nairobi International Trade Fair, providing valuable information on irrigation techniques.
KaiOS Technologies and Mastercard Partner to Expand Digital Payments for SMEs in Africa
KaiOS Technologies, a Chinese tech company specializing in operating systems for mobile devices, has teamed up with Mastercard to integrate digital payment solutions into its affordable smart-feature phones. The partnership will initially launch in C?te d'Ivoire and Nigeria, with plans to offer low-cost payment acceptance devices aimed at fostering a more inclusive digital economy.
The initiative focuses on empowering small and medium-sized enterprises (SMEs) in developing markets, where the adoption of digital payments is often hindered by high costs and technical challenges. By leveraging Mastercard’s payment technology, KaiOS devices will allow SMEs to accept payments through various methods, including Mastercard QR, Mobile Point-of-Sale (mPOS) solutions, and Tap & Go contactless technology.
The enrollment process is designed to be user-friendly, enabling business owners to authenticate their credentials through a one-time password on their KaiOS-powered phones.
Flutterwave Expands Send App Remittance Service to 49 U.S. States
Flutterwave, Africa's payments technology company, has expanded its remittance service, Send App, to 49 U.S. states, excluding Texas, through a strategic partnership with MainStreet Bank, a subsidiary of MainStreet Bancshares Inc. Based in Fairfax, Virginia, MainStreet Bank is known for its innovative banking solutions, including its Avenu SaaS platform, which connects app partners directly to bank systems.
This expansion aims to provide the African diaspora with a faster, more affordable way to send money home, further strengthening Flutterwave’s position in the global remittance market. Launched in 2021, Send App has grown into a trusted platform, enabling money transfers to over 30 countries with support for multiple currencies and features such as real-time support, exchange rate updates, and transaction tracking.
Remittances play a crucial role in Africa’s economy, with the United Nations estimating that USD 100 billion was sent to the continent in 2022. Flutterwave's expansion addresses the growing demand for secure, efficient, and affordable remittance services, supporting essential needs such as healthcare and education for millions of Africans.
AfDB Approves USD 130 M Loan for Tanzania’s Youth Agribusiness Program
The African Development Bank Group (AfDB) has approved a USD 129.7 M loan for Tanzania's "Building a Better Tomorrow: Youth Initiatives for Agribusiness" program. Aimed at creating business opportunities and jobs for young people in agriculture, the project is expected to cost USD 241.3 M in total.
The initiative will support around 11,000 young "agripreneurs," including 6,000 agribusiness owners, and provide financial assistance to 2,500 young farmers lacking access to commercial loans. Each agribusiness is anticipated to employ an average of five workers, boosting job creation in the agricultural sector.
The program will incorporate digital technologies like satellite technology and artificial intelligence to improve agricultural productivity and decision-making for farming cooperatives. In addition to the AfDB’s contribution, the funding package includes grants from the KOAFEC Trust Fund and East-West Seed, with the Tanzanian government contributing USD 110.41 M.
Safaricom PLC Invests USD 800 M in Kenya’s Healthcare Digital Transformation
Safaricom PLC has announced a KSH 104 billion (~USD 806 million) investment to implement an Integrated Healthcare Information Technology System (IHTS) in Kenya over the next 10 years, starting in February 2025. The initiative, in collaboration with Apeiro Limited and Konvergenz Network Solutions Limited, aims to revolutionize healthcare delivery and support the new Social Health Insurance Fund (SHIF), which will replace the National Health Insurance Fund (NHIF).
Safaricom and its partners will also provide training and project management to ensure smooth implementation. This initiative builds on Safaricom’s success with digital platforms like the Hustler Fund and the fertiliser e-voucher programme, signaling the company’s continued commitment to driving technological innovation in Kenya’s public sector.
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