MTN Group, a leading telecommunications operator in Africa, reported a significant surge in fintech transaction volumes, marking a 32% increase in its latest financial year.
The company also finalized a deal with Mastercard, valuing its fintech business at nearly R100 billion.
MTN Momo Saw a Significant Surge Lately
According to MTN, its Mobile Money services, known as MoMo, now boast 72.5 million active users, reflecting the growing adoption of mobile-based financial solutions across the continent.
The momentum in MoMo transactions remained robust, with volumes and values experiencing a notable uptick of 32.2%, indicating the increasing reliance of Africa’s tech-savvy population on mobile phones to access banking services and bridge service gaps.
MTN’s expansion into fintech aligns with a broader trend among African telecom operators, including Airtel Africa, Safaricom, and Vodacom Group, as they transition from traditional voice and text services to digitalization.
The goal is to capitalize on the burgeoning fintech sector and unlock new revenue streams. Airtel Africa, for instance, is considering a listing for its mobile money business.
The Company Has Embarked on a Project to Lay a Terrestrial Cable
While MTN reported a slowdown in group service revenue growth, increasing by 6.8% to R210.1 billion, the company witnessed a 2% growth in its total number of subscribers, reaching 294.8 million. Despite this growth, MTN declared a final dividend slightly below analysts’ estimates.
In addition to its fintech endeavors, MTN has embarked on a project to lay a terrestrial cable connecting 10 African countries.
This initiative aims to address challenges posed by disruptions in internet connectivity caused by damage to undersea cables, a common occurrence in many African nations.
MTN’s investment in network enhancement amounted to R41 billion over the past year, with R10.1 billion allocated to South Africa alone.
Causes of Reduction in the Company’s Profit
This investment is particularly crucial in mitigating the impact of rolling power cuts imposed by Eskom, South Africa’s state-owned electricity provider.
However, inflation and currency devaluation in Nigeria, MTN’s largest market, posed challenges, leading to a significant reduction in the company’s profit for the year.
As MTN continues to navigate the dynamic African telecom landscape, its strategic focus on fintech expansion and network infrastructure development underscores its commitment across Africa.
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