MTN Group plans to separate its Fintech business as a subsidiary by Q1 2022
May 5, 2021557 views0 comments
Africa’s largest telecommunications network, MTN Group, has begun working on its slimming down process with plans now focused on the separation of the company’s financial technology (Fintech) business as well as looking to sell its South African towers by the close of September.
In a statement by the Johannesburg-based wireless carrier, it plans to spin off the lucrative fintech business unit, which includes its mobile money service, which is scheduled to be finalised by the end of March 2022. Also, the company revealed that there have been over 20 responses from interested parties over the sale and leaseback of domestic telecom masts which is also slated for the end of September this year.
Why is the company selling assets? The largest wireless carrier in Africa has further stated that it is in the process of selling assets to realise value from its pan-African businesses and pay down debt; while it has disposed of e-commerce units and listed country divisions on local stock exchanges. Similarly, MTN plans to put out its stake in IHS Holdings Limited, a pan-African operator of telecom masts that’s planning an initial public offering, and exit the Middle East.
Meanwhile, MTN’s fintech business unit recorded an 87 per cent year on year rise in transactions by value to $53 billion while revenue from the same unit rose 28.5 per cent year on year in Nigeria during the same first quarter of 2021 to over 24 million in the volume of transactions, largely driven by increased adoption of Xtratime and our core fintech services. However, the division has previously been valued at $6 billion by Nedbank Group Limited.
Elsewhere, the MTN Group is also expanding its fibre business and has added more than 2,000 kilometres in Zambia, the largest in Africa. This is followed by the company’s bid for telecoms operating licence in Ethiopia while it awaits response and regulatory approval from the country on the bid. If successful, MTN will hold 56 per cent of the Ethiopian licence