Africa’s mobile money operators are making moves that give us an idea of how much their operations are worth. Valuating the sector has not been easy given several of the biggest mobile money operators are branches of other larger companies. A good case in point is South Africa mobile carrier MTN which recently revealed its mobile money unit is valued at $5 billion. The valuation is part of a bigger plan to either sell or list out a portion of it. This helps the businesses capitalize on investors eager for fintech assets.
MTN has a global subscriber base of 280 million people and 46 mobile money users (added 12 million along in 2020). MTN Chief Executive Ralph Mupita estimated the unit’s valuation at $5 billion to $6 billion. He went on to confirm the decoupling which is poised to be complete by next year.
According to a report by FT, the move will cut $3 billion in debt from the company. Cumulatively, the group will strive to maximize the growing investor interest in mobile money, developed by African telecoms in the past decade. Mobile phone subscribers can receive and send money outside the banking system, even sell ancillary services such as microinsurance.
MTN Mobile Money’s closest rival Airtel Africa has 21 million users. The group’s financial service interests run a joint insurance venture with 10 million customers. MTN is expecting more regulatory scrutiny across Africa.