* Deal gives Wari access to mobiles for money transfer
* New company could challenge Orange's mobile money
* Wari to list on West Africa stock exchange after Tigo deal
By Nellie Peyton
DAKAR, March 19 When Senegalese money transfer
firm Wari agreed to buy the local mobile arm of Luxembourg-based
Millicom International Cellular last month, it set
the stage to challenge Orange's hold on mobile phones
in French-speaking West Africa.
Wari plans to list on the West Africa stock exchange (the
BRVM) in Ivory Coast this year, after the $129 million deal to
buy mobile operator Tigo from Millicom is done, its CEO told
Reuters in an interview.
Wari is Senegal's top money transfer service, a low-cost
alternative to Western Union that allows customers to
transfer cash and pay bills at gas stations, banks and even
The deal will give Wari the capability to transfer money on
mobile phones, a rapidly-expanding service that is dominated in
the region by French company Orange. Orange has nearly 8 million
mobile users in Senegal, twice as many as runner-up Tigo.
While the deal will only give Wari a telecoms license in
Senegal, it could use it as a starting point for a push for
greater competition in other French-speaking countries in West
Africa such as Mali, Guinea and Ivory Coast.
"For the last mile, we needed to be able to connect the
population. This is where the idea came from of looking for a
telecom vehicle, and we found (it) ... with Tigo," Wari Chief
Executive Kabirou Mbodje said.
He brushed off a question about Orange.
"At the end of the day what's important is do we offer the
best services to the population, do we meet their needs, do we
design the service to be the most cost-effective. These are the
kind of things we're thinking about, not competition, and then
the public will decide," he said.
An Orange spokesman declined to comment about competition in
Mobile money is a sector with deep potential: millions of
people in West Africa lack bank accounts and use cash transfers
or mobile money for everything from utility bills to receiving
pension payments and receiving remittances from families abroad.
The number of mobile money transaction points in West Africa
grew twice as fast in 2015 as in any other region in the world.
Mbodje estimated the company will be worth "a couple of
billion dollars" when listed, a process he said he has started.
An official at the BRVM told Reuters it had not yet received
an application. The Tigo deal, announced last month, must still
be approved by Senegalese authorities.
Mbodje has a relevant background for trying to capture some
market share from Orange. He studied telecommunications in
France and then launched several digital start-ups before
creating Wari in Senegal in 2008.
Wari has grown rapidly and now operates in 62 countries
including 40 in Africa, with a particularly strong presence in
Senegal and its West African neighbours.
Orange, formerly France's national network France Telecom,
has dominated telecoms in Senegal and other former French
colonies in Africa for years. It is still expected to stay the
market leader for home internet and fixed line phones which Tigo
does not offer.
But experts say it could lose ground in mobile phones.
"Orange should be worried," said West Africa IDC analyst
Oluwole Babatope. "The market is changing. You need to be very
strategic and understand the terrain."
Orange's mobile market share fell from 56 to 52 percent in
2016, according to the Senegalese telecoms regulator, while
Tigo's grew from 22 to 26 percent. A third player, West African
company Expresso, a subsidiary of Sudan's Sudatel, also gained
A deputy Orange CEO told Reuters last month that revenue
growth had halved last year across the Middle East and Africa
and he expects slow growth this year.
Nevertheless, the company is still growing in Africa. Orange
completed its rebranding of Bharti Airtel's mobile
business in Burkina Faso last week after buying it last year. It
also completed an acquisition of Tigo in the Democratic Republic
of Congo last year.
"WARI ME MONEY"
Orange highlights Orange Money, the rival to Tigo Cash, as a
new business driver. It was almost 30 percent of turnover growth
for its West African partner firm Sonatel in 2016, Sonatel's
latest report says.
" is not thinking about a telco in terms of voice and
data. They see mobile money as where the growth is," said Moussa
Dabo, a Dakar-based investment officer at AFIG Funds.
He said Orange's hold on the market will be hard to beat
because it has better infrastructure even though Tigo will
likely be strengthened by the acquisition.
Adding to its challenges, Orange Money had to suspend
transfers between France and three West African countries in
February, when West Africa's central bank said it was not
authorised to transfer money outside the currency zone, the bank
said this week.
Mbodje said the Wari brand will be Tigo's main strength.
"Wari me money" is a common phrase in Senegal, where many
professionals send money back home to poorer rural relatives.
Boubacar Ndiaye, a 45-year-old taxi driver in Dakar, said he
uses both Orange Money and Wari for money transfers in the
capital, but Wari is the only one present in his home village.
"Orange is the good network," he said. But when he learned
that Tigo was Senegalese-owned, he said he would buy a sim card
and use both.
"A man has to be proud of his country," he said.
(Reporting by Nellie Peyton; Additional reporting by Mathieu
Rosemain in Paris and Loucoumane Coulibaly in Abidjan; Editing
by Edward McAllister, Tim Cocks and Anna Willard)