MTN Mobile Money users in Uganda cry foul

For a telecommunications firm the size of MTN in Uganda, which since its inception 13 years ago has led the way in service innovation, the breakdown of the mobile money network in the country is an indictment on the firm’s history.

MTN cannot say it didn’t see the early warning signs. In mid July, the network was down for two days, disrupting businesses. But the gravity of the network breakdown then does not compare to current predicament, with the Mobile Money service almost down for the last two to three weeks. The agents are not amused. “I wanted to sue them (MTN) but the lawyers told me it was impossible because I did not have a copy of the contract I signed with MTN,” said Nicholas Atuhairwe, an agent based at Kikoni, a Makerere University township.

Atuhairwe says the manner in which MTN entered into an understanding with their mobile money agents makes the latter susceptible to many forms of disservices. “They did not even give us time to read the contracts; we were not even given copies. All they told us to do was to sign and then deposit Shs 1,000,000 as the initial credit.

"We were later compelled to sign an exclusive agreement stopping us from operating other telecom money services which could otherwise have saved us during this crisis,” Atuhairwe explained.

He further added that he has lost over Shs1.3 million since the service started experiencing faults. “I used to make over Shs 60,000 worth of profit in a day but since the problem started, I have not served more than six customers. What MTN is doing is criminal,” he said.

To understand how huge MTN’s mobile money service is, you have to go back to its early days when it was launched. More than Shs 5bn exchanged hands in over 180,000 transactions within the first three months of its launch in 2009.

MTN Mobile Money agents help customers carry out transactions in Kampala. Today, up to 400,000 active customers make more than 385,000 transactions a month, according to GSMA’s Mobile Money for the Unbanked 2011 annual report. More than 1,400 agents have signed up to MTN’s Mobile Money, according to the report.

Consultancy firms are expected to follow MTN mobile money’s breakdown with keen interest. GSMA’s Mobile Money for the Unbanked 2011 report, a respected publication, played down the threat of technology breakdown in MTN’s mobile services as one that could see customers fleeing. While the report agrees that a technology breakdown could lead to first-time customers abandoning the service for good, it notes that the biggest worry for the service is when agents run out of cash to meet transactions. That prediction now faces its biggest test.

Agents wonder why MTN has not come out to clearly tell them what the problem is. “It is normal for companies to experience shortcomings in their services but it is disrespectful to the customers if such companies do not communicate in time,” complained Gloria Owembabazi, a mobile money outlet owner in Makerere University.

“We are not talking about simple money to take a girlfriend out. Students keep their tuition and upkeep money worth millions of shillings on their phone accounts; it is psychologically torturing if they cannot keep daily track of that money,” she added.

However, MTN Uganda corporate affairs manager, Justina Ntabgoba-Kayemba told the media that her company sent out a statement last week informing customers about the ongoing system enhancement. “We sent those messages last week but unfortunately, some have not yet received them.”

In a copy of the statement that Ntabgoba-Kayemba sent, MTN wrote that the first phase of the upgrading process started in early November and is expected to end mid next month.

The company also warned that mobile money will not resume normal efficiency levels until the upgrading process is finished. “During this period, mobile money services, including new registrations, mobile money transactions, and airtime top-up via mobile money will be intermittent. Customers and agents attempting to transact on MTN mobile money will receive an SMS response advising them of the error or a confirmation of a successful transaction,” reads part of the statement.

However, the good news is the service is being upgraded to even offer more services than they are already serving which will include among others withdrawing western union money using the mobile money service. Of the new services that will be unveiled after the upgrade, Mobile Money customers accounts will be linked to their bank accounts so that in event of being in a place where you cannot access you bank account, you can still withdraw from one of the authorized agents using mobile money. The upgrade is expected to be completed by December 15, according to the notice from MTN.