MTN, Africa’s biggest mobile operator, is aiming to become Africa’s biggest bank.
The ambitious business strategy was revealed by MTN CEO Rob Shuter yesterday during the Deloitte Africa in 2018 Outlook conference in Woodmead. The company is encouraged by the progress made by its Mobile Money offering in other geographies that it operates in. This is despite MTN Mobile Money failing to gain traction in the South African market, with the telco eventually killing it off in 2016 due to lack of commercial viability.
“The core digital service that we have decided to put our money on is Mobile Money,” said Shuter. “Mobile Money is really about leveraging the strength of the brand and leveraging the strength of the distribution because we have built a huge informal distribution network for prepaid airtime to bring customers into a transactional banking system.”
He pointed out that MTN has deployed Mobile Money across 14 markets and “if we look at our 30-day active users, which is the most important metric, we are growing by half a million customers a month. I think that’s pretty cool and today we are sitting at 21 million subscribers.
“We are a new age transactional banking provider and it’s a very big imperative for us, and the key thing we want to do is to scale it rapidly.”
According to Shuter, MTN wants to build Mobile Money into a 60 million customer business in the next three to four years.
“We will be the largest bank in Africa, leveraging scale, network, brand, infrastructure and distribution,” he noted.
Detailing the company’s other plans, Shuter said he is upbeat about the economies of Africa and the Middle East, where the telco has operations.
“We are very optimistic about what we see. For us, we see more opportunities than challenges. We see the need to focus on our core geographies and this is partly because this is where we see the growth. We see Asia-Pacific as the fastest growing economy but the Middle East and Africa are also following suit.”
MTN looks at the market in terms of three core customer segments – consumer, enterprise and wholesale, Shuter pointed out.
“If we look at consumer, what’s quite inspiring for us, looking at our geographies, is we have a population of about 650 million people across the 22 markets we operate in. In the next three to four years, that 650 million people is going to grow to 700 million people. An increase of 50 million people is the same as adding another South Africa to the portfolio.
“So that gives us a lot of opportunities, actually still in the traditional voice business – SIM penetration, voice, handsets, SMS, etc.”
The three biggest markets for MTN are SA, Nigeria and Iran, Shuter said, adding the economic conditions are improving. “In Nigeria, oil prices are coming back and inflation is coming under control. South Africa is also witnessing winds of change politically, while Iran is a market that is opening up, particularly to Europe, despite the rhetoric that we hear from the US.”