Vodacom CEO Pieter Uys has backtracked on the targets the top mobile operator envisaged for its mobile banking service, M-Pesa, confirming analysts' concerns that they were too ambitious.
At the local launch, Vodacom executive director Romeo Kumalo stated the company would aim for 10 million subscribers within three years.
However, two months post-launch, Vodacom reported only 21 000 registered M-Pesa subscribers.
Analysts point out that, at the current subscriber growth rate, it will take Vodacom approximately 10 years to achieve its target.
Uys concedes the initial targets are a bit of a stretch. He points to the growth of the service in Tanzania, noting that, after two years, there are approximately 3.5 million subscribers.
Nonetheless, Uys argues that subscribers are growing daily, but adds that it is important to first educate South Africans about the service before seeing a surge in subscribers.
Key to the success of the campaign is an extensive distribution channel. Uys notes that Vodacom is signing up smaller distributors at a rapid rate and notes that deals with the bigger retailers are imminent.
Uys predicts M-Pesa will likely become profitable within the next 12 to 18 months. He notes, however, that the function of M-Pesa was more of a retention tool to add value to its customers than a business imperative. However, he is confident the service can be profitable.
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Local M-Pesa is slow starter
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