I just came across an online news article that quoted an announcement by Equity Bank’s CEO James Mwangi from the on-going World Economic Forum in Cape Town earlier this week that their Mobile Virtual Network Operator (MVNO) Equitel now has over 800,000 subscribers. In the same update, James Mwangi also said that they also planned to distribute 5 million Equitel SIM cards to their Equity Bank customers in Kenya before the end of the year.

I predicted earlier this year via this blog post that it was inevitable that Equitel will become Kenya’s third largest mobile network by overtaking Orange who are currently occupying this position after Safaricom and Airtel. If indeed Equitel does manage to distribute its 5 million SIM cards to their Equity Bank customers by the end of the year, this will come to pass. Indeed, according to the latest Communications Authority sector statistics, Safaricom had 21.85M subscribers, Airtel had 7.4M subscribers and Orange had 3.36M subscribers.

What is clearly evident is that Equitel is growing like a weed given that they are leveraging the massive installed customer base that Equity Bank has of over 9 million customer accounts. In addition, from a mobile money perspective, although Safaricom has over 18 million M-Pesa customers as of this writing, Equitel will surely make a dent on them by next year if they continue growing at their current rate and by also offering significantly cheaper mobile money transaction rates compared to Safaricom.

Equitel is really in this game for the mobile money opportunity and wants to take the fight back to Safaricom who essentially dominate mobile money transactions in Kenya. Indeed, M-Pesa contributed close to Kes. 36B in their FY 2015 financial results. This is HUGE and Equity Bank wants a piece of this action, badly! The most amazing thing about Equitel’s ascendent trajectory is that the MVNO has not even been marketing in the conventional sense, yet. All Equity Bank is doing at the moment is pushing their SIM cards free of charge to their existing bank account holders – all 9 million of them – via their branches and agency banking outlets.

Equitel’s value proposition is that their mobile SIM card enables them to unlock a range of value-added financial services from Equity Bank beyond just mobile money transactions that will help them achieve better customer ‘lock-in’. Safaricom’s M-Pesa will find it hard to match Equitel’s mobile money offering from this perspective as a standalone mobile money service even though its the dominant ecosystem at this juncture in Kenya. Equitel is banking on these differentiators as drivers to acquire more customers and transactions going forward.