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Tigo turns up heat in African mobile money market

New service in Rwanda bulks up company's offerings as it battles Vodafone, Safaricom and MTN

A new mobile money service from Millicom International Cellular, the operator of the Tigo brand, is turning up the heat in one of Africa's booming technology markets.

Tigo Rwanda subscibers have been signing up for the Tigo Cash service since May 13. Tigo has similar services in Ghana and Tanzania as well as in three Latin American markets. The company plans to integrate the Rwanda and Tanzania services, according to Tongai Maramba, product manager of Tigo Cash.

MTN MobileMoney and the M-Pesa service from Vodafone and Safaricom are the current leaders in the African mobile money arena. But mobile phones are spreading extremely fast across the continent and the market for mobile money services is expanding.

Tigo Rwanda has a subscriber base of more than 670,000 users as of January 2011, according to information from the Rwanda Utilities Regulatory Authority (RURA).

Mobile money transfer services on the continent have roots in Africa's lack of infrastructure, particularly bank branches. Only one in five people have bank accounts in Rwanda, mainly because of the prohibitive cost of operating branches in rural areas.

"Tigo Cash is basically a wallet on your mobile phone," said Tigo Rwanda CEO Tom Gutjahr. "Basically you have your money in your pocket or on your mobile phone and you can send and receive money any time of the day or night," he said.

The service is available to any user who is above 18 years with a Tigo SIM card and a valid identification card for registration. Non-Tigo customers will be able to receive money from Tigo subscribers, but they cannot send money using the service.

Mobile money services are slowly changing the face of payment systems on the continent. For example, in Uganda, the National Water and Sewerage Corporation (NWSC) has recently closed offices nationwide and launched an e-water payment system through which clients can settle bills via a mobile money application.

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