MTN Group is proceeding with the separation of its fintech operations in Ghana, Uganda, and Nigeria, hoping to finalise the process in the first half of 2025.
The move is part of a broader strategy to complete Mastercard’s minority stake acquisition, which values MTN’s fintech unit at $5.2 billion.
While Ghana and Uganda’s regulatory processes are progressing smoothly, Nigeria presents notable challenges. “Nigeria has a bit more complexity with some more regulatory processes to work through,” MTN CEO Ralph Mupita told Bloomberg in a recent interview.
The company remains optimistic about resolving these hurdles as it seeks additional investors alongside Mastercard.
“We are open to selling up to a maximum of 30% of the fintech business,” Mupita said, adding that “there might be three or maybe even four strategic partners within that” framework.
MTN’s push into fintech follows its 2023 agreement with Mastercard, which includes an investment of up to $200 million.
The company’s mobile money transactions surged 35% in constant currency terms, surpassing $320 billion last year, highlighting fintech’s increasing role in MTN’s business model.
However, the telecom giant is navigating financial strain. MTN reported a R9.59 billion ($526 million) net loss for 2024, exceeding analyst expectations of R3.87 billion, largely due to currency devaluation in key markets.
The naira’s depreciation had a particularly severe impact, with MTN Nigeria’s pre-tax loss widening by more than 200% to N550.3 billion ($355.76 million).
Despite these financial setbacks, Mupita expressed confidence in a turnaround. “That pain which we’ve had for 18 months is abating somewhat,” he said during a media call. “The business is growing very strongly. So I’m actually very bullish and confident that we’ll see strong recovery in Nigeria.”
To manage financial pressures, MTN has implemented cost-saving measures, cutting 3.8 billion rand in expenses, including 1.2 billion from renegotiated tower leases, according to Chief Financial Officer Tsholofelo Molefe.
The telco also declared a final dividend of R3.45 per share for 2024, surpassing market expectations, with plans to increase it to at least R3.70 per share for 2025.
In Nigeria, MTN has implemented tariff hikes on voice and data services, possibly aligning with broader industry adjustments to rising operational costs and economic volatility.
Beyond fintech, MTN is exploring network-sharing agreements, a common strategy in European markets, to optimize infrastructure costs. With Mastercard’s investment pending final approvals, the success of the fintech spinoff, particularly in Nigeria, will be critical to MTN’s long-term strategy and financial recovery.
