South African multinational mobile telecommunications company, MTN Group, has assessed its units following Mastercard and TPG Holdings investments of R4.38 billion (US$300 million) in Airtel Africa’s mobile money business at R39 billion (US$2.65 billion) valuation.
MTN Group valued its mobile money arm at R75 billion (US$5.15 billion), joining wireless carriers planning to list these businesses in a region that has more mobile money accounts than anywhere else in the world.
Ralph Mupita, MTN’s Chief Executive Officer, said MTN had conducted a similar valuation to that of Airtel, which sits at about US$5 billion. However, no decision has been made regarding the listing, although the option has been considered the best approach to unlock value, said Mupita.
Recent reports have revealed that Mobile money has become one of the fastest-growing income sources for wireless network operators like MTN and Vodafone Group. Sub Saharan Africa has been noted as having more mobile money accounts than anywhere else in the world due to the region’s struggle with banking infrastructure. Partly owned by Vodacom, Safaricom was reported to be holding the most prominent mobile money provider in the area, with 27 million people of its customers using M-Pesa as a mobile bank, buying groceries, borrowing money, and transferring cast.
According to GSMA, the Sub Saharan region boasts US$490 billion in transaction values, with Nigeria and Ethiopia yet to roll out. Although Nigeria has been slow in rolling out mobile money services, it provided some provisional licences last week. Moreover, banks in Nigeria cut off MTN during a negotiation process where mobile operators wanted to lower transaction commission costs.