(Bloomberg) – MTN Group Ltd. estimates its arm on mobile money at around $ 5 billion and will consider listing the division joining African wireless carriers to monetize a service particularly popular on the continent.
The move comes after Mastercard Inc. and TPG Holdings LP invested $ 300 million in Airtel Africa Plc’s mobile money business, valued at $ 2.65 billion.
“With ratings similar to Airtel, our rating would be Rand 75 billion or about $ 5 billion,” said Ralph Mupita, chief executive officer of MTN. “A decision has not been made yet, but listing will be considered if that is the best approach to unlocking the value.”
Johannesburg-listed MTN has already announced that it will be outsourcing its entire fintech business, including mobile money. According to a notice dated March 26, this was done by Nedbank Group Ltd. Valued at 87 billion rand (6 billion US dollars). Adding the process could take up to a year.
At close of trading in South Africa’s trading capital, MTN shares were up 1.7% and so far this year they have gained 48%.
Mobile money, where users store and manage cash in an account connected to a mobile phone, is one of the fastest growing revenue streams for sub-Saharan Africa mobile companies like MTN and Vodafone Group Plc-controlled Vodacom Group Ltd. and Safaricom Ltd.
The region, which is struggling with limited banking infrastructure, has more mobile money accounts than anywhere else in the world. At the end of 2020 it was around 548 million or 54% of all customers, according to the GSMA, the global industrial group.
Safaricom, based in Nairobi, is the largest mobile operator in the region with its M-Pesa service. There is potential for further growth, although the two most populous countries, Nigeria and Ethiopia, have not yet been retired.
MTN’s rating was previously reported by the Financial Times.
(Updates with the Nedbank rating in the fourth paragraph)
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