MTN has sharpened its focus to fintech, infrastructure and connectivity over the next five years, refining its “Ambition 2025” strategy, which was premised on reducing debt, exiting operations in the Middle East and growing new businesses such as financial services.
Like other operators in Africa, the group is working to increase its average revenue per user, a key metric in assessing the performance of mobile carriers. For MTN that is at about $2 (R35) at present.
“When I meet global CEOs in the developed world, they’re talking about $50, $80 [per user],” group CEO Ralph Mupita said in an interview.
The group ended the six months to end-June with subscribers up 4.7% to 297.7-million, making it the largest in the sector by that metric.
“When we sit back and look at the next five years, we see the demand for data and fintech services as a structural growth trend still to come,” Mupita said.
“I often tell the story that when I first joined the MTN Nigeria board in 2017, I saw the average usage per customer was 500MB. Today it’s 14 gigabytes; that’s in eight years. There’s this surge of demand [for data] as people use the internet for their own productivity and lifestyles.”
MTN sees a similar opportunity for financial services, giving more people largely left out of the formal banking system access to mobile payments, lending and insurance.
“These are the two engines we expect will guide our structure for the next five years. We are arranging ourselves around three platforms: connectivity, fintech and digital infrastructure. That’s what we think about beyond 2025,” Mupita said.
Regarding connectivity, the group is looking to grow its market share for home internet services, competing in the fixed wireless market using 4G and 5G technology, and in fibre.
The company is also looking to increase the number of customers using data services.
“We still have a lot of customers who are not yet using data-capable devices. Our customer base is almost 300-million. Probably just 50% of them are using data every day and are still stuck in the voice era that we want to push through by offering digital,” said Mupita.
To this end, MTN’s business in SA is offering smartphones for R99, hoping to entice more people to start using data services.
In the period active data subscribers increased by 10.3% to 164.4-million, accounting for 55% of total customers.
Mobile Money (MoMo), MTN’s fintech segment, reported a 1.7% increase in monthly active to 63.2-million and fintech transaction volumes rose 14.5% to 11.1-billion in the period.
Financial inclusion
“We have an ambition to try to include as many people as we can,” Mupita said. “We’re not trying to be a big bank; we’re not trying to be a universal bank. We look at fintech with the lens of financial inclusion. People who don’t have access are the customers we seek.”
Last year, the group received a R3.8bn investment in its fintech business from payments giant Mastercard, valuing the unit at $5.2bn.
“Digital infrastructure for us is super important because data workloads, over time, are going to grow fourfold in the next three to four years. That growth will need infrastructure: fibre, data centres and so forth.”
The group sees building its own fibre network as unviable in SA, even with its ambitions to be a big presence in the market. It has highlighted this position on a number of occasions, leaving only an acquisitive strategy on the table.
Outside SA, MTN has a goal of reaching 135,000km of fibre by the end of 2025. During the review period the company’s infrastructure unit, Bayobab, secured new contracts amounting to R148.2m, with about 19,000km of fibre rolled out. That brings MTN and Bayobab’s total fibre footprint to more than 127,000km.
Mupita also sees the growing use of AI by consumers and businesses as a driver for connectivity and digital infrastructure.
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