Lycamobile’s arrival into the mobile money business has the potential to disrupt Airtel Uganda Mobile Commerce and MTN Uganda Mobile Money’s supremacy. The telecom has applied for Payment Services Provider (PSP) and Payment Systems Operator (PSO) licenses, which will allow it to issue electronic money and facilitate different financial activities.
The regulatory procedure is still on, with the Bank of Uganda’s director of communication, Mr. Kenneth Egesa, noting that licenses will be provided after the process is completed. One of the restrictions imposed by the central bank is that Lycamobile have two million subscribers, which the business maintains it is on course to meet.
Lycamobile intends to borrow from the experiences of other East African mobile money companies and to remunerate agents with an appealing package. MTN and Airtel now hold over 90% of mobile money accounts in Uganda, but Lycamobile seeks to shatter their duopoly through a competitive strategy.
Despite obstacles and market concerns, Lycamobile sees chances for expansion in Uganda’s Fintech industry. According to experts, changing the taxation policy on mobile money transactions might increase transaction volumes and benefit mobile money companies.
However, Lycamobile must comply with capital market listing criteria, which need positive earnings after tax in at least three of the previous five accounting periods. The Uganda Communication Commission (UCC) likewise has a strict timetable for listing, with severe sanctions for failure to comply.
Exits, acquisitions, and mergers have occurred in Uganda’s telecom business, with some companies encountering financial difficulties. Lycamobile’s entry into mobile money is a deliberate move to navigate the competitive landscape and open up new business opportunities.
