MTN’s Fintech Frenzy: The Telco’s Desperate Attempt to Stay Relevant
In a shocking turn of events, MTN Group, the struggling South African telecommunications giant, has announced that its fintech business is flying high, despite the company’s core business struggling to stay afloat.
Red Ink Galore
In its latest results, MTN revealed that its traditional voice service revenues continue to decline, while its fintech business is growing rapidly. But that’s not all – the company’s core business is also bleeding red ink due to the crashing naira in Nigeria and the devastating effects of the civil war in Sudan.
Fintech Frenzy
So, what’s driving MTN’s fintech success? According to the company, its fintech revenue increased by 27.2% year on year, with strong performances in Ghana, Uganda, and Cameroon. But that’s not all – the company’s MoMo mobile money application is a real game-changer, with 66 million active users and a growth rate of 9.1% in the past six months.
Remittances on the Rise
But that’s not all – MTN’s remittance business is also booming, with a growth rate of 42.4% year on year to US$1.9 billion. And it’s not just the numbers that are impressive – the company’s remittance service is also a major player in the African market, with 174 outbound corridors and 577 inbound corridors.
Bank-Tech Bonanza
And then there’s the company’s bank-tech offering, which has seen a staggering 73% growth in loans to $731.6 million. It’s no wonder that MTN’s CEO, Ralph Mupita, is touting the company’s fintech business as the key to its future success.
Commoditization of Network Services
But why is MTN investing so heavily in fintech? The answer lies in the company’s "Ambition 2025" diversification and growth strategy, which aims to combat the commoditization of network services by diversifying into new areas such as fintech, media, gaming, and the internet of things.
Vodacom’s Fintech Foe
And MTN is not the only telco that’s jumping on the fintech bandwagon. Rival Vodacom, for example, has its own M-Pesa service, which is a major player in the African market. But MTN is determined to stay ahead of the competition, with a focus on scaling its fintech business through sequential launches of commercial initiatives with Mastercard across various markets.
The Bottom Line
In the end, it’s clear that MTN’s fintech business is the company’s best hope for staying relevant in a rapidly changing market. And with its focus on fintech, remittances, and bank-tech, it’s clear that MTN is committed to becoming a major player in the African fintech landscape. But can the company’s fintech frenzy be enough to save it from its struggling core business? Only time will tell.
