UPDATE: MTN To Offer Western Union Money Transfers

MTN Group Ltd. (MTN.JO), Africa's largest cellphone-network operator, said Wednesday it has signed a pact with Western Union Co. (WU) that will allow its users to send and receive money transfers using mobile accounts via their handsets.

The commercial agreement covers the rollout of the money transfer service in the 21 African and Middle Eastern countries where MTN operates, beginning with Uganda where MTN said it has more than one million customers registered for its MobileMoney product. It said Uganda receives nearly $500 million in remittances every year, making up 3% of its gross domestic product, according to the World Bank.

"After bringing domestic financial services to many of our customers, we will now enable customers to receive money from abroad on their mobile phones to take out at their convenience with their local merchant, send it to family or pay a bill," said Pieter Verkade, MTN executive for MobileMoney.

MTN has, in partnership with local banks, rolled out its MobileMoney service in Benin, Cameroon, Ghana, Guinea Bissau, Ivory Coast, Rwanda, South Africa and Uganda. It allows subscribers to send money domestically, buy airtime for their phone and make basic utility payments using a cellphone.

-By Robb M. Stewart, Dow Jones Newswires; [phone]; [e-mail]