Vodafone has signed an agreement with MTN that will allow both of its customers to transfer money in East Africa.

The partnership is said to enable affordable international remittances between Vodafone M-Pesa customers in Kenya, Tanzania, Democratic Republic of Congo and Mozambique, and MTN Mobile Money customers in Uganda, Rwanda and Zambia.

The deal affects a potential 49 million people. Vodafone has 7.6 million M-Pesa users in Africa through its Vodacom unit, and over 20 million Kenyan subscribers through Safaricom, in which its has a 40% stake. MTN has more than 22 million mobile-money users.

Under the memorandum of understanding, Vodafone Group and MTN will share best practice and work together to define rules and standards of mobile-based remittances in Africa.

"Our agreement with MTN to connect our mobile money wallets in East Africa is a fantastic example of co-operation and interoperability between competing mobile operators," said Michael Joseph, Vodafone’s director of mobile money. "By working together, we will deliver cheaper, faster money transfers, improving the lives of many people living in the seven countries involved."

Serigne Dioum, MTN’s group head of mobile financial services, said that it aims to build a scalable model with Vodafone that will accelerate remittance roll-out across East Africa. The agreement follows the launch of Vodafone’s M-Pesa mobile transfer and payment between Tanzania and Kenya in March 2015.

Vodafone has 7.6 million M-Pesa users in Africa through its Vodacom unit, and over 20 million Kenyan subscribers through Safaricom, in which its has a 40% stake. MTN has more than 22 million mobile-money users.

Global Telecom Business