Fintech lifts MTN Group in tough Q1 performance

In spite of a challenging macroeconomic environment defined by persistently high inflation and local currency depreciation in some of its key markets, MTN Group’s fintech operations were one of the few standouts in the first quarter of the year.

Africa’s largest telecom operator today revealed its Q1 results, which show that while active data customers increased by 7.8% to 149.2 million, data revenue declined by 14.7%.

Conversely fintech revenue climbed by 11.4%, while monthly active Mobile Money (MoMo) users increased by 6.2% to 65.5 million.

MTN Group CEO Ralph Mupita noted global geopolitical tensions, which remained high during the period, as a factor influencing the telco’s performance.

He said: “This included the ongoing civil war in Sudan, which severely affected network availability and revenue generation in our business in that market. We were also impacted by cable cuts that resulted in downtime for significant subsea cables connecting the African continent, particularly in West Africa.”

Despite these setbacks, Mupita said MTN is determined to build the “largest and most valuable fintech” platform.

This as fintech is turning into a golden goose for many telcos, including MTN Group, which said in Q1 fintech revenue increased by 25.0% year-on-year (YoY).

Mupita said: “The contribution of advanced services to total MoMo revenue rose to 30.1% (up 6.6pp). Active MoMo users increased by 6.2% YoY to 65.5 million; excluding OTC (over-the-counter) customers in Nigeria, we closed at 62.2 million representing a growth of 8.1% YoY; largely driven by Ghana, Uganda, South Africa, Rwanda and Benin.”

“The development of our overall fintech ecosystem continued to exhibit strength and resilience with a 18.3% increase in transaction volumes to 4.8 billion transactions, and transaction value up by 11.2% to $72.3 billion.”

Key drivers

Turning to other key fintech verticals, Mupita said: “Our payments and e-commerce ecosystem performed strongly and grew revenue by 44.6% YoY, supported by the growth in merchants and unique-payer activity. The total value of MoMo merchant payments rose by 32.6% YoY to $4.7 billion.”

In banktech, he said the company facilitated a total loan disbursement value of $371.7 million, representing YoY growth of 17.4%.

He added: “The growth was underpinned by the maturity of partner-led lending products and the launch of new products in our key markets. Uganda and Ghana were the key drivers of the performance driving growth in both total loan disbursement and unique users utilising the service.

“The total value of remittances sustained its strong momentum and increased by 63.5% YoY to $883 million in Q1. This was driven by growth in the number of active corridors as well as improved customer experience and focused digital marketing activities.

Outbound corridors grew by 237% to 155 and inbound corridors rose by 75% to 583.”

In the period, Mupita added that MTN Group’s insur-tech platform aYo reported growth in registered policies by 12.4% to 23.9 million.

“Positive performance has been contributed by the SA device insurance book and stronger focus on high priority markets,” he said.

On the group’s super app, Ayoba, he said in Q1, the platform grew its user base by 33.7% YoY to 35 million monthly active users.

Mupita said: “This growth is attributed to the higher adoption and retention rates achieved, fuelled by an enhanced user experience in the communication suite. We also enhanced our content offering that includes music, channels and games.

“Nigeria, our largest market, reached 8.5 million monthly active users, growing users by 27.3% YoY.

“In the quarter, Ayoba’s focus was on launching new B2B services and continuing to ramp up commercial monetisation through display ads, premium sales and payments.

“Our monthly active user base outside the traditional MTN GSM footprint grew to 11.3 million, a 78.1% YoY growth highlighting the platform’s ability to scale as an OTT.”