MTN aims to become Africa’s biggest digital bank

MTN aims to become Africa’s biggest digital bank

Africa’s biggest mobile operator, MTN, is aiming to become Africa’s biggest digital bank, leveraging scale, network, brand, infrastructure and distribution. MTN is seeking to challenge rival Vodacom as Africa’s biggest digital bank by tripling its customer numbers within three years.

The ambitious  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.

MTN Mobile Money allows anyone with a mobile  to send and receive money quickly, safely, affordably and conveniently.

“The core  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 matric, 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 partially because this is where we see the growth. We see Asia-Pacific as the fastest growing economy but 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 opportunity, 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.”

He said the other aspect that defines the market is the low-level of Internet and digital services.

“So there are a lot of positives in the consumer side of the business. If we are looking at the market size, we are looking at R500 billion to R600 billion in all the geographies that we operate in; that’s about two-thirds of the market. If you want to be successful for the long run in our industry, you have to be very well-positioned in the consumer market in terms of brand, products, network, technology, resources, etc.”


Regarding the enterprise market, Shuter said it’s valued at R210 billion and growing 8% year-on-year.

“For sure, we have to be successful in the consumer segment because that’s the biggest segment but for an operator like us, a push in the enterprise sector can make a very big difference. It’s a large market with decent growth.

“In fact, of that R210 billion market, about 60% is just in pure connectivity and most of that is purely mobile. On top of that, there is rapid adoption of new technologies like unified communications, machine-to-machine, Internet of things and connected devices.”

Speaking about the R30 billion wholesale market, Shuter said MTN is looking to tap into services like roaming to boost its revenue.

“Wholesale is about telcos selling to telcos. So telcos and mobile operators across those geographies build networks in-country but they still need to connect to other networks and they need to find a way to get their traffic either up into the sky to satellites or to the edge of Africa and connect it to an undersea cable for international traffic. So we are also looking to take advantage of this.”

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