The Contribution of Mobile Money Technology on the Performance of MTN Cameroon

Friday, November 25, 2022

The Contribution of Mobile Money Technology on the Performance of MTN Cameroon

Department: Management

No of Page: 65

Project Code: MGT9

References: Yes

Cost: 5,000XAF Cameroonian

 : $15 for International students

Get this Project



Background to the Study

The evolution Mobile money technology can be traced some few years backed, mobile money technology started in Kenya in 2007 through M-PESA (“M” for “mobile”, “pesa” for “money” in Swahili), a popular mobile money service offered by a local mobile network operator, Safaricom. Since then, the mobile money industry has rapidly expanded, particularly in developing economies in Africa and South Asia such as India, Bangladesh, and Pakistan.


Mobile money was initally made popular by Safaricom and Vodafone’s M-Pesa. The M-Pesa application is installed on the SIM cards of customers and works on all handset brands. It is free to register and the user does not need to have a bank account.


Safaricom receives fees for withdrawals and transfers, but keeps deposits into the mobile wallets free. The transfer service was quickly picked up for use as an informal savings account system and electronic payment mechanism for bills, goods and services. With M-Pesa, Kenya is at the forefront of the mobile money revoluton: the number of agents across the country increased by 40 percent in 2013.


It is now estmated that 24.8 million subscribers use mobile money services, like M-Pesa, in Kenya (Communicaton Commission of Kenya, 2013). Mobile money technology has spread rapidly in many developing countries.


However, only a handful of these initiatives have reached a sustainable scale, in particular GCASH and Smart Money in the Philippines; Wizzit, MTN Mobile Money and FNB in South Africa; MTN Mobile Money in Uganda; Vodacom M-PESA and Airtel in Tanzania; Celpay Holdings in Zambia and MTN Mobile Money, Orange Money in Côte d’Ivoire.



The Philippines was one of the earliest adopters of mobile money services when SMART Communications launched SMART Money in 2001. The service, which uses SIM Tool-Kits, enables customers to buy airtime, send and receive money domestically and internationally via mobile, and pay for goods using a card. In 2004, Globe Telecom launched GCASH.


This service provides a cashless method for facilitating money remittances, settle loans, disburse salaries or commissions and pay bills, products and services via text message.In South Africa, MTN Mobile Money was launched in 2005 as a joint venture between the country’s second largest network operator MTN and a large commercial bank, Standard Bank.



In Uganda, MTN was the first operator to launch mobile money services in 2009 and remains, by far, the market leader (Intermedia, 2012). By law, each mobile money provider has to partner with a bank. However, users do not need a bank account to use mobile money services.


In Tanzania, Airtel was the first mobile network operator to introduce a phone-to-phone airtime credit transfer service, “Me2U,” in 2005 (Intermedia, 2013).


Airtel partners with Citgroup and Standard Chartered Bank to provide m-money services, including bill payments, payments for goods and services, phone-to-phone and phone-to-bank money transfers, and mobile wallets.  In 2008, Vodacom Tanzania launched the second East African implementation of the Vodafone m-money transfer platform, M-Pesa.



Finally, in Côte d’Ivoire two mobile operators, Orange and MTN, are competing head to head in the mobile money market (CGAP, 2012). Orange Money was launched in 2008 by Orange in partnership with BICICI (BNP Paribas), and MTN Mobile Money was launched in 2009 by MTN in partnership with SGBCI (Société Générale) (GSMA, 2014).



Mobile money technology was first launched in Cameroon in 2011. The Cameroonian subsidiaries of telecommunication leaders MTN and Orange pioneered the concept and officially launched it in 2012. The circumstances which prompted its launching were similar to those of most developing countries, particularly concerning the small numbers of members of the population who held bank accounts.


Although the services which mobile money provides in Cameroon do not include financing now, its introduction had significantly increased the financial inclusion rate (29%) by 2017, from 9% Sustainability 2020, 12, 183 6 of 17 in 2012.


As a direct consequence, many citizens have been able to ply trades and launch startup enterprises, which have resulted in indirect employment for of the order of 5000 people. The mobile money transactions which have accompanied this surge amount to in the region of FCFA 3500 billion in 2017, a figure which represents 17.5% of the GDP of Cameroon.


This represents an increase of more than 1000% from the FCFA 300 billion recorded in 2016. The introduction of mobile money has enabled Cameroonian households to incur reduced costs by saving and reduce the risk of loss and theft which had accompanied saving in the past].


As the mobile telephone penetration rate was 71% in 2014, and that of holding bank accounts had been one of the lowest in the world at 12%, it is abundantly evident that mobile money could not have arrived in Cameroon at a more promising time.


The mobile money service in Cameroon is provided through a partnership between commercial bank and mobile network operators (MTN Cameroon, Orange Cameroon, CAMTEL, and Nexttel) because only commercial banks are allowed to issue electronic money, and the mobile network operators own the telecommunication infrastructures and technologies to deploy the platform.



The number of mobile users also continues to rise rapidly in both rural and urban areas of Cameroon, partly due to the poor condition of the fixed-line network. There were roughly 7.4 million mobile phone subscribers in the country in 2009.


Therefore, the competing firms in the telecommunication industry need to provide the appropriate services that meet customers’ expectations to gain a larger share of the market. This explains why MTN, a major mobile telecommunication company in Cameroon; has as vision to “lead the delivery of a bold digital new world” that “make customers life a whole lot brighter” (Cameroon Web, 2017).


Consequently, the twin launch of 3G & 4G network in 2015 by MTN which nearly contributed 14.2% of its total income; positioned itself as a reliable world-class network provider and strategic partner of Cameroon’s socioeconomic development. MTN is perhaps the most important telecommunications network in Cameroon and the Central African sub-region.


It had nearly 9.9 million subscribers on 31 December 2016 out of Cameroons’ population of 21 million with a national coverage of close to 93 per cent; its client services were certified ISO 9001:2008 by SGS in 2014 in recognition of its continuous efforts to provide the best quality of service possible to its customer.


In 2015, MTN upgraded to 3G and 4G LTE which definitely has had an impact on their clients. All mobile money transaction carried out in Buea are automatically transfer or recorded in the MTN Cameroon main server in douala and letter on reconcile in the MTN head office in South Africa.

1.2 Problem Statement

Mobile Money technology appears to be the solution to the multiple problems, namely, liquidity, means of payments, debt collection, working capital and financing. Its adoption and usage in ther day-to-day activities have had a positive impact on their performance, (source).


However, with today's rapidly changing technological evolution there is a great need for telecommunication companies in Cameroon to open up to technological innovations Numerous studies have been undertaken in countries like South African, Nigeria, and Ghana on the effect of technology on the performance of MTN (Sogbodjor, 2015).


However, no sufficient work has been done in Cameroon with regard to technology and performance issues. Technology is essential for high performance of any business establishment nowadays, however technology comes with it benefits and challenges. MTN Cameroon adopted the 3G technology in 2015 and few months later, the 4G network was introduced.


It is worth noting that this innovation came up fifteen years after MTN has been operating on 2G. Technology has been a stepping stone while to others it has been a stumbling block. The appearance of technology years back to the world has provoked the innovative and competitive nature of countries.


Technological awareness has gone a long way to make telecommunication what it is now. Although mobile money does not provide an all solution for all of the financial problems with which businesses are faced, the benefits far exceed the disadvantages which are associated with adopting the system.


Irrespective of whether the system is used in isolation or conjunction with a bank account, it stands to increase the sales of businesses if properly used and reduce their operating costs, with both factors making positive contributions to improving their financial performance.


 Objectives of the Study

  • The main objective of this study is to assess the influence of mobile money technology on the performance of MTN Buea

Specific objectives

  • To assess how 3G and 4G internet has affected MTN performance in Buea
  • Sought out the impact of cost of mobile money technology on performance of MTN Buea
  • To examine the challenges of mobile money technology on the performance of MTN Buea. 

Check out:  Management Project Topics with Materials