MTN to have another go at a mobile money service in SA and Nigeria
The mobile operator pulled the service years ago after it failed to gain traction, but is confident it can now make it work
MTN planned to launch mobile money services in its two biggest markets, SA and Nigeria, in the first half of 2019 as part of its efforts to be “the biggest provider of mobile financial services in Africa”, MTN CEO Rob Shuter said on Tuesday.
MTN and Vodacom pulled the mobile money service in SA in 2016 after it failed to gain traction, but Shuter said he was confident the company could “make it work” as large segments of the population were still reliant on cash transactions.
Mobile money services would be relaunched in the operator’s home market in the first quarter of 2019.
In Nigeria, where MTN faces claims worth a staggering $10.1bn, the central bank has agreed to allow mobile operators to act as payment-service banks. It issued guidelines for the licensing and regulation of these entities earlier in November.
MTN, which has 55-million subscribers in Nigeria , intended to apply for a licence in the next month with the aim of launching mobile money services in that country in the second quarter of 2019, Shuter said.
The group offered mobile money services in 14 of its 22 markets. It had about 27-million mobile money customers and was targeting 60-million customers “in the next few years”, Shuter said.
Tuesday’s announcement gives credence to Shuter’s recent comments that MTN had no plans to exit Nigeria or abandon its initial public offering there, despite deep regulatory troubles.
The Central Bank of Nigeria has said it wants MTN to return $8.1bn of "illegally" repatriated dividends, while the country’s attorney-general says MTN owes $2bn in taxes.
The claims have led to a sharp fall in MTN’s share price, from R107.99 in late August to R81.04 on Tuesday.
Nigerian Communications Commission chair Olabiyi Durojaiye said on Tuesday the regulator was “ready to co-operate with you [MTN] and to assist”.
Shuter told Bloomberg that MTN was in continuing discussions with Nigeria’s central bank and other institutions and “narrowing down what the key issues are”. MTN’s strategy was twofold: seek legal action while simultaneously looking for an amicable resolution, he said.
Shuter also said that MTN’s micro-insurance partnership with MMI Holdings was gaining traction. About 2-million policies had been issued.
As part of its push into digital services, MTN would also acquire music streaming service Simfy, he said.
Simfy, which has agreements with major record labels, would operate as a standalone entity and would not be rebranded, Shuter said.