Airtel Money will no longer be a part of Airtel Uganda. What does this mean for Airtel's business? Airtel Money will now be a part of Airtel Mobile Commerce Uganda Limited (AMC Uganda).
The move comes on the heel of Uganda's National Payment Systems (NPS) Act, 2020, passed on 4th September 2020 and announced in an official newspaper on 5th March 2021. There is a background to this story.
In 2015, a commercial High Court ruled against five telcos — MTN, Warid, Uganda Telecom, Airtel, and Africell — operating mobile money in Uganda, saying that mobile money operations were illegal, as per Tech next.
The aftermath of this event was a petition by Abdu Kantunu, a Bugweri County Member of Parliament, to have mobile money regulated under the Financial Institutions Act of Uganda. The reason was that the companies were registered as telcos and not as financial institutions, which means the Bank of Uganda did not license them.
Under this new setup, AMC Uganda will be regulated and supervised by the Bank of Uganda. AMC will conduct all Airtel Money services while partnering with and through the licensed telecommunications network of Airtel Uganda.
The separation will result in the migration or sharing of the Airtel Money accounts and related information with the new company.
Airtel Uganda primary focus will be on the operations of telecommunication infrastructure and the offering of telecommunications services to its network subscribers and licensed operators.
Uganda is not the only country that has taken this path, as Ghana has done something similar in the past. In 2015, Ghana separated its telecommunication services from financial services, ensuring that all institutions offering the latter are regulated under the Banking Act, 2004 (Act 673).
Uganda in focus
GDP: $37.372 billion in 2020 compared to $35.17 billion in 2019
Population: 45,741,000 in 2020 compared to 44,269,587 in 2019
GDP per capita: $817 in 2020 compared to $794 in 2019