Telenor seeks bigger share in mobile money

Telenor, the major shareholder of Grameenphone, is ready to invest a large chunk of money in Bangladesh and seeks more stakes in the proposed mobile financial service (MFS) platforms.

In a new guideline, Bangladesh Bank proposed to limit an individual telecom company's shares to 15 percent in a mobile money company.

It does not give Telenor enough powers to secure its investment, Heidi Berg, project director of MFS at Telenor Group, said at a discussion with journalists in Dhaka yesterday.

No-one is allowed to hold more than 15 percent in the company, where banks need to hold at least 51 percent and telecom operators together should not exceed 30 percent, according to the guideline.

At present, banks run MFS as a separate wing, but according to the guideline by the central bank, it is stipulated that the new companies should be formed with a minimum paid-up capital of Tk 100 crore.

“The proposed guideline gives us the idea that a consortium will be formed containing at least seven players, which will be a complicated process,” said Berg.

If allowed by the Bangladesh government, Telenor wants to break the monopoly in the MFS market and is ready to invest Tk 400 crore to Tk 500 crore, she said.

Currently, bKash is a top mobile banking venture in Bangladesh and the second largest in the world in terms of transactions.

Berg said Telenor wants a majority of the shares in the platform, and if that is not possible, a 51 percent share may be given to a bank and they want to play with the remaining 49 percent.

“The proposed process is complex, challenging and will be time-consuming,” said Mahmud Hossain, chief corporate affairs officer of Grameenphone.

Grameenphone will share its opinions and recommendations with the central bank by the August 13 deadline.

Telenor that owns 55.8 percent of Grameenphone proposed another option for MFS. Berg said Telenor can buy a bank if allowed by the government, similar to what it did in Pakistan and Serbia.

“Allow us to buy a bank and then we can serve people jointly.”

Globally, 2.5 billion adults do not have access to financial services. Of them, 1.7 billion people have mobile access, according to Berg's presentation.

Of the people that are transacting money through mobiles, only 5 percent of them have their own accounts in Bangladesh; the number is 97 percent in Kenya, 72 percent in Tanzania and 70 percent in Uganda.

Currently, there are 1.12 crore active accounts in Bangladesh, while the number of agents is 5.3 lakh with a daily average transaction amount of Tk 420 crore.