MTN’s fintech business to be spun off core operations in Q1’22

Adown frica’s largest telecommunications network, MTN Group, has begun working on its slimming

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.

The Johannesburg-based wireless carrier said in a statement 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 explained 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 panAfrican 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 volume of transactions, largely driven by increased adoption of Xtratime and its core fintech services. However, the division has previously been valued at $6 billion by Nedbank Group Limited.

In other developments, the 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.

Nigerian Communications Commission (NCC) has signed a Memorandum of Understanding (MoU) with the Nigerian Communications Satelite (NigComSat) to enhance the release of contagious bandwidth in one of the most suitable frequency spectrum bands to aid the early deployment of the 5G network services in Nigeria.

The signing also saw the two parastatals chart way on the relocation of the NG-1R satellite of NigComSat to the standard Cband 300MHz (3.9GHz – 4.2GHz) portion of the band, which is considered more suitable in terms of satellite service offering due to its cheaper terminal devices for end-users.

Furthermore, the relocation will leave the non-standard Cband 400MHz (3.5GHz – 3.9GHz) portion of the band for 5G use while proceeds from the auction of the 5G spectrum will be used to offset the cost of relocating the NG-1R.

At the MoU signing recently in Abuja, Umar Garba Danbatta, executive vice chairman, NCC, while lauding the efforts by NigComSat leadership, said NCC initiated negotiations with the NigComSat on making some adjustments to its satellite operation