MTN says it is seeing great opportunities in Africa’s nascent digital economy and is building “distinctly African” services and products.
The company’s newly released annual report for the 2021 financial year offers a glimpse into its strategic plans for the fintech industry, whose revenue in the same period grew 30.9% to R15.9 billion. Digital and fintech services include among other things value-added services, Mobile Money, insurance, airtime lending and e-commerce.Â
“The company is positioning itself as a dominant player in fintech services, and we are building the largest and most valuable platforms that are distinctly African digital marketplaces for the widest variety of products and services,” it said.
The Mobile Money (MoMo) service, which has a strong footprint in Nigeria, the company’s largest market, is venturing into full banking services, after it was granted a banking licence this year.
MoMo offers MTN users a platform to send and receive cash, and users can also pay for products and services from participating merchants using the mobile app. Mobile money has gained traction in markets outside South Africa, where mainstream banking services are not established.
The company noted that in Africa, “financial services and e-commerce penetration is marginal,” but instead of presenting a challenge, the conditions offer an opportunity to accelerate digital disruption within financial services, insurance, lending, remittances and e-commerce.Â
Battle for mobile money
MTN’s competitors in the country are increasingly adopting value-added services as part of a global shift by telecommunication companies to expand revenue streams and embrace digital innovations. Vodacom in June 2021 launched the VodaPay “super app” which offers a wide digital shopping services and payments. Its M-Pesa mobile payments service marked 15 years of existence this year.
M-Pesa, which Vodacom claims is Africa’s largest fintech provider, is operational in Kenya, Tanzania, Mozambique, the Democratic Republic of Congo, Lesotho, Ghana and Egypt. It boasts 51 million customers, according to a statement issued in March.
On the other hand, MTN says its active Mobile Money at 56.8 million in 2021.
“We want to be Africa’s leading digital platform, unlocking economic growth through financial and digital solutions for consumers and businesses of all sizes,” says MTN.
So enticing are the financial prospects of fintech services that MTN is advancing a plan of separating it from the mobile business by creating a separate unit with its own financial reporting. The separation is expected to be completed by the end of the second quarter of 2022.
The other businesses to be cut off from the GMS operations is the fibre and data centre businesses. Their separation is earmarked for completion in 2023, depending on the finalisation of regulatory approvals.
“In fintech, we are focused on two major things, completing the structural separation and then securing strategic partners to support the acceleration of the business,” said CEO Ralph Mupita.
MTN operates in 19 markets and is in the process of exiting Afghanistan, its last remaining business in the Middle East.-fin24
