Lycamobile’s entry into the mobile money business could potentially challenge the
dominance of Airtel money and MTN Mobile Money. The said telecom company has applied
for licenses to operate as a Payment Services Provider (PSP) and Payment Systems
Operator (PSO), allowing it to issue electronic money and facilitate various financial
transactions.
The regulatory process is ongoing, with the Bank of Uganda director of communication, Mr.
Kenneth Egesa, stating that licenses will be issued upon the conclusion of the process. One
of the conditions set by the central bank is for Lycamobile to have a two-million-strong
subscriber base, a target the company claims to be on track to achieve.
Lycamobile aims to learn from the successes of other mobile money operators in East
Africa and plans to offer an attractive package to remunerate agents. Currently, MTN and
Airtel control over 90 percent of mobile money accounts in Uganda, but Lycamobile hopes
to break their dominance with a competitive strategy.
Despite challenges and market uncertainties, Lycamobile sees growth opportunities in
Uganda’s Fintech market. Experts suggest that reconsidering the taxation policy on mobile
money transactions could positively impact transaction volumes and benefit mobile money
operators.
However, Lycamobile faces the task of meeting capital markets listing rules, requiring
positive profits after tax in at least three of the last five accounting periods. The Uganda
Communication Commission (UCC) also imposes a tight deadline for listing, with potential
fines for non-compliance.
The telecom market in Uganda has witnessed exits, acquisitions, and mergers, with some
companies facing financial challenges. Lycamobile’s move into mobile money is a strategic
step to navigate the competitive landscape and provide a new avenue for growth
