Equity Group Holdings has partnered with Airtel, the mobile services provider, to provide telecommunication and mobile banking services. These services will be provided using Equity’s thin sim card, which can be inserted on top of existing sim cards.

The Equitel cards are operational in Kenya with other countries to be served later in the year. The charges are aligned with those of Airtel with zero charge for money transfer services, which analysts say will give Equitel an edge.

Safaricom and Orange Telekom charge more than double for mobile money transactions across networks.

For Ksh1,000 ($10) sent to other networks, Safaricom charges Ksh48 ($0.48) and Ksh15 ($0.15) for its registered users. Orange charges Ksh70 ($0.70) to other networks and Ksh30 ($0.30) for registered users.

READ: Equity-Airtel deal steals Safaricom’s thunder with money-transfer platform

Equitel’s standard voice and SMS charges will be at Ksh4 and Ksh1 respectively across all networks.

Equitel may achieve what Airtel’s zero prices have failed to do by pooling customers from the banking and mobile platforms.

“The marketing strategy will determine the success of Equitel; despite a huge customer base, the nature of Equity’s customer segment of middle and low-income earners may not be easy to convince,” said Eric Munywoki,  a research analyst at Old Mutual Securities.

Analysts said more banks are likely to launch mobile products as they seek to spread risk.

Equity hopes to ride on its network and that of Airtel across the region to serve Kenya, Uganda, Tanzania, Rwanda and the Democratic Republic of Congo.

The Equitel sim card will retail at Ksh500 with Ksh200 free airtime.

“We plan to recruit a subscriber base of over five million by the end of the year,” said James Mwangi, Equity group chief executive officer.
The pilot project featured one million free thin sim cards.

Equitel loan

It remains to be seen whether Equity will succeed this time round with Equitel after the M-Kesho flop.

In 2010, Safaricom and Equity launched M-Kesho, which offered savings and loan accounts on the M-Pesa network.

The two failed to agree on how to share profits, as growth of the product stagnated.

Equity pulled out in 2012. In the same year, Safaricom launched a loan arrangement with CBA Bank — M-Shwari, which offers loans at a flat rate of 7.5 per cent per month.

READ: Safaricom, CBA launch mobile phone fixed deposit account

This year, KCB launched a mobile-based loan product, repayable at a fixed interest rate of between four and 12 per cent per month.