Staff Writer
Mastercard Inc. has agreed to purchase a minority share in MTN Group Ltd.’s financial technology division, which the company values at $5.2 billion. MTN Group Ltd. is Africa’s largest cellphone carrier.
The signing of the final investment agreements is anticipated to take place very soon, according to a statement released on Monday by MTN Chief Executive Officer Ralph Mupita.
The young, tech-savvy population of Africa is progressively bridging gaps in services, including banking, with the use of their mobile phones. For cellphone carriers, this has created a profitable and quickly expanding market in the fintech industry. Mobile payment systems have received a lot of attention to this point, and a number of rapidly expanding startups, such as Flutterwave Inc. and Interswitch Ltd., have entered the market.
Rival companies to MTN, such as Airtel Africa Plc, Safaricom Plc of Nairobi, and Vodacom Group Ltd. of South Africa, are all in various phases of transitioning from traditional voice and text mobile use to digitalization, with the overall goal of separating and monetizing the businesses in the long run.
Mastercard has already invested in Airtel’s mobile money division. By securing funding from Facebook Inc. and Silver Lake Partners in 2020, India’s Jio Platforms Ltd., the digital division of billionaire Mukesh Ambani’s Reliance Industries Ltd., established a precedent.
MTN has previously stated that it intends to raise 25 billion rand ($1.3 billion) through the sale of assets. The company recently sold and leased back some of its South African cell towers, and it also has plans to sell some of its West African holdings. Additionally, it has a stake in the New York-listed tower owner IHS Holding Ltd. that it may sell down, although any sale in the near future has been put off due to the tower company’s low trading prices and a conflict with its management.
