Story audio is generated using AI
MTN, Africa’s largest telecoms group, is doubling down on its growth strategy, which it hopes will push its client base past the 350-million mark by 2030 and convert millions of its customers into using more of its data products.The group’s growth blueprint, outlined at its capital markets day in Johannesburg this week, rests on three vectors: connectivity, fintech, and digital infrastructure.The Ralph Mupita-led group has set a target of connecting at least 20-million homes during this period, having identified a market opportunity of between 70-million and 90-million homes without high-speed internet.The company’s fintech business, which already rakes in nearly R30bn in annual revenues, is also expected to play a key role in the group meeting its revenue targets.To this end, it plans to offer more retail banking services in its biggest market, Nigeria.Serigne Dioum, CEO of the group’s fintech franchise, told investors that the company is looking to sweat its Nigerian banking licence.“The gap between neobanks and fintech is narrowing. For us the most important [question] is, what services are we going to provide to our customers to fulfil their needs and demands we have in Nigeria,” Dioum said.“In Nigeria we have a banking licence, but it has gaps. We can’t currently do lending to our clients. We also can’t participate in remittances directly, and other services we can’t do.“We are in the process of augmenting our licence to enable us to provide those services that will become an ecosystem of services for our customers.”It remains to be seen whether MTN succeeds in its endeavour to augment its licence, as Nigerian authorities have been cautious about granting full mobile money operator licences to telecom providers.They have preferred to opt for the payment service bank (PSB) model that restricts the range of services that companies such as MTN can offer.The situation is different in Ghana, where MTN’s mobile money MoMo platform poses a big threat to the country’s established financial institutions. In Ghana almost two-thirds of the company’s customers have active mobile money wallets. MTN is continuing the work of carving out its fintech business into a separate standalone entityIn Nigeria, the company’s MoMo platform closed 2025 with 3.7-million active wallets, far lower than its target of 30-million to 40-million. The large unbanked population in that country presents a big opportunity. MTN is continuing the work of carving out its fintech business into a separate standalone entity. It operates separately with its own management, customer base and reporting structure. MTN has long argued that the value of such assets is not truly reflected in its share price. The structural separation has entailed a complex process for the group that has to be carried out in every country individually. The group has received key approvals for the process in Uganda and Ghana.In April, MTN said it had completed the fintech business separation in Ghana. In January 2024, payments giant Mastercard invested R3.8bn in MTN’s fintech business as part of a plan to partner with industry experts to help grow the new revenue line. The transaction values the unit at $5.2bn (R85bn).In South Africa, where the group was founded three decades ago, the company outlined plans to cut as much as R6bn in costs over the next three years as the country’s second-largest mobile provider seeks to boost local earnings. Despite having more customers outside the country in fast-growing markets such as Nigeria, South Africa remains an important anchor for the JSE-listed telecom group. Yet investors are concerned about its anaemic growth at home amid the country’s paltry economic expansion.MTN South Africa CEO Ferdi Moolman said the group is in a similar situation to that of European telecom providers a few years ago — a mature market with slower subscriber growth where expansion tends to be a function of price increases or expense efficiency. Moolman emphasised that the South African business cannot grow at the same “sheer volume levels” as other African countries where MTN operates. Its primary strategic role in the broader group is to act as a “cash upstreaming engine” and a dividend anchor, he said.To that end, MTN has set itself a number of priorities at home, starting with costs. The company aims to cut R4bn-R6bn across its operation by 2029.The company is also continuing with efforts to fix its prepaid offering. MTN and archrival Vodacom experienced pressure in their prepaid efforts in recent years as consumers came under strain in the economic downturn. They have also had to deal with increased competition from Telkom, the country’s fastest-growing mobile business, as well as nontelecom players such as Capitec and FNB.With additional reporting by Kabelo KhumaloBusiness Times
