Africa’s Top Telco Seeks Further Deals For 30% Of Booming Fintech Arm

Africa’s leading telecommunications giant, MTN Group Ltd, remains open to selling up to 30 percent of its thriving fintech arm amid soaring transaction volumes. Despite facing its largest profit decline in three decades due to the devaluation of the Nigerian naira, the company witnessed a 32.2 percent surge in mobile money transactions, boasting 72.5 million active users of its so-called MoMo services.

CEO Ralph Mupita revealed intentions for a second round of minority investment in the fintech division, citing openness to divesting a significant stake given the right valuation.

“We are looking at a second round of minority investment into the fintech business,” Mupita told reporters on a call, per Bloomberg. “We are open to sell up to 30% of the business at the right valuation.” The company recently closed a deal with Mastercard that values the business at USD 5.2 B.

With Africa’s burgeoning tech-savvy population increasingly relying on mobile platforms for financial services, the fintech sector presents a lucrative opportunity for telecom giants like MTN.

MTN’s move follows a trend among its competitors like Airtel Africa Plc and Safaricom Plc, who are also eyeing digital transformation to capitalize on the evolving market landscape. Airtel Africa is contemplating a listing for its mobile-money business, signalling a broader industry shift towards monetising digital services.

Despite macroeconomic challenges in key markets, such as Nigeria, where inflation and currency devaluation eroded profits, MTN remains optimistic about future prospects. Mupita highlighted ongoing discussions with regulators to address tariff adjustments and renegotiate contracts to navigate market uncertainties.

Moreover, MTN’s strategic initiatives extend beyond fintech, with plans underway to expand terrestrial cable infrastructure to enhance connectivity across ten African countries. The company’s commitment to bolstering network capabilities underscores its long-term vision amidst evolving market dynamics.