By George Obulutsa
DAR ES SALAAM (Reuters) - Tanzania's Zanzibar Telecom (Zantel), 51 percent-owned by United Arab Emirates' Emirates Telecommunications Corp, said on Wednesday it plans to launch a mobile phone money transfer service next week.
The introduction of Zantel's service -- dubbed Z Cash -- is due to precede Vodacom's launch of Vodafone's M-Pesa money transfer service later in the month.
"We are introducing Z Cash next week. It's essentially the same kind of service that Vodacom is going to introduce. It's just that we are going to get there first, Noel Herrity, Zantel's director general, told a regional telecoms conference.
Kenya's leading mobile phone operator Safaricom launched M-Pesa in March 2007, and in the 11 months it handled 9.3 billion shillings.
Most Tanzanians -- like many of their neighbours in Kenya's rural areas -- have scant access to conventional bank accounts.
Services like Z Cash and M-Pesa are seen as a convenient way to send money, especially from people living in urban areas to those in the countryside.
Users hand cash to an agent who issues them with an electronic receipt which can be forwarded via mobile phone text message to a friend, family member or other contact. Using another agent, the recipient can exchange the message for cash at their location.
Britain's Vodafone owns 40 percent of Safaricom with the rest owned by the government, which is currently offloading a 25 percent stake in an initial public offering.
Vodacom Tanzania is 65 percent-owned by South Africa's Vodacom and the rest is held by private Tanzanian investors.
Herrity said Zantel had 1 million subscribers at the end of March. It had just over 684,000 subscribers at the end of 2007, according to the Tanzania Communications Regulatory Authority.
Herrity said with the help of Etisalat, Zantel planned to start a service that would allow users of United Arab Emirates-based Thuraya satellite phones to use Zantel's network and pay rates like their mobile phone users.
"We are teaming with Thuraya to provide satellite service at mobile phone rates starting this month," Herrity said.
Emirates Telecommunications is Thuraya's largest shareholder.
Zantel originated in the semi-autonomous island of Zanzibar in 1999 and expanded services to mainland Tanzania only in 2005. It has a roaming agreement that allows it to use Vodacom's masts on mainland Tanzania to supplement its own.
It is also in the process of setting up a 3G network.
