MTN Group mulling separate listing of $5 billion mobile money business

South Africa’s MTN Group has valued its mobile money arm at about US$5 million ahead of a potential listing of a minority stake by the telecommunications giant.

The valuation comes after Mastercard and TPG Holdings invested $300 million in Airtel Africa’s mobile money business, giving it a total value of $2.65 billion.

“With similar valuations to that of Airtel, our valuation would sit at R75 billion or about $5 billion,” MTN’s CEO Ralph Mupita told the Financial Times. “No decision has been made as yet, but listing will be an option considered if that will be the best approach to unlock value.”

JSE-listed MTN, which has 280 million global subscribers, announced the separation plan last month as part of a strategy shift to refocus its business and cut R43 billion ($3 billion) of net debt. “We think the best way to run these businesses is to structurally separate them,” Mupita added.

The new strategy seeks to attract rising investor interest in the mobile money business built by African telecoms companies in the past decade. Mobile money services allow users to send or receive money outside banks, and is one of the fastest-growing sources of income for the likes of MTN, Vodacom and Safaricom across sub-Saharan Africa.

MTN’s mobile money business added almost 12 million new users last year to total more than 46 million, while there were 548 million mobile money users across the continent at the end of 2020.