Music streaming services are turning to telcos to make Africa pay

Africa, with its internationally recognized musical talent - and expanding mobile phone use - is essential to Spotify's (SPOT.N) plans to expand its customer base to one billion people. With musicians like Nigeria's Burna Boy and South Africa's Black Coffee being streamed throughout the world, Africa was an easy pick, and the continent now accounts for more than a third of the company's 85 new markets. Payment is a challenge on a continent where many individuals have a cell phone rather than a bank account. As a result, Spotify's first objective as it pursues a strategy unveiled in February to nearly expand its coverage is to win over the telecom providers, who are generally associated with music streaming. When Spotify first arrived in Kenya in February, Phiona Okumu, the business's head of music for Sub-Saharan Africa, told Reuters that the company had secured "other payment options," including M-Pesa. Safaricom (SCOM.NR), Kenya's largest telecoms operator, owns M-Pesa, which is used to move money, save, borrow, and make payments for goods and services.

"A lot of African countries are unbanked so that means they don't use credit cards and this is very true for a lot of east African (countries) and in Kenya you use M-Pesa for the most part," Okumu said.

Elsewhere in Africa, Spotify is seeking other collaborators.

"We are having conversations with the right partners to ensure that we are providing solutions to payment problems that several African consumers face in different parts of the continent," Okumu said.

By Editorial Panel
12 Oct 2021

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