MTN enters ‘third chapter’ of its growth

13th May 2022

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

     

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Information and communications giant MTN Group is entering its third chapter of growth as it makes inroads into the financial services market.

Following its formative years post-democracy, the group established itself as a voice-centred network and expanded into new markets such as Rwanda and Uganda, before transitioning in 2008, in what it calls its second chapter, into data services, driven by the emergence of smartphones.

“Now, as the group enters a new stage of development, where ecosystems and platforms will drive growth, MTN is steadfast in its plans to make inroads into the financial services industry towards the ultimate goal of promoting and driving financial inclusivity on the continent,” says MTN Group CEO and president Ralph Mupita.

Speaking during a webinar entitled Think Big, an initiative of financial services group PSG, he said that MTN Group is spinning off its fintech division, with ambitions of bringing in strategic investors to bolster its expansion in the fintech space.

“This strategic shift of focus is indicative of the group’s broader objective to consolidate its business model and move decisively towards solidifying its position as a truly pan-African company,” he explains, noting that MTN is “very determined” to deepen digital and financial inclusion across Africa.

“We have seen the positive impact that mobile money has made in countries like Ghana and Uganda and we believe that by expanding into this area, we can create a win-win environment for business and for broader African society.”

A similar opportunity can be found in a market like Nigeria, where the company will start operations after securing a MoMo payments services banking licence from the Central Bank of Nigeria (CBN), which enables MTN Nigeria to offer financial services in line with the CBN’s guidelines and support the Nigerian government in fulfilling its agenda of driving financial inclusion in the country.

MTN Group has been working to simplify operations and allocate its human and capital resources to leverage the opportunities that exist on the continent and produce profitable returns in the long term.

This included scaling back its interests in the Middle East.

Meanwhile, Mupita believes that consolidation in the telecommunications sector is inevitable and that “the days of having a four- to six-player telecoms market on the continent are coming to a swift end”, leaving a sector dominated by just two or three major players who have the capabilities and capacity to rally massive amounts of capital investment to sustain the industry’s expansion.

“Having a market that is saturated by a number of players is not sustainable. There is simply not a big enough profit pool to meet the return and other financial objectives of a number of industry players,” he said, adding that MTN has every intention of being one of the scale operators in all its markets.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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