MTN to widen Fintech service offering, grows profit by 23%

MTN Nigeria, the largest mobile telecommunication firm in the country has reported a 23 per cent rise in its FinTech revenue.

The telecom giant reported a record N1.169 trillion in revenues for the year ended December 2019 up 12.5 per cent year on year. Profit for the period under review was N202.1 billion up 38.7 per cent year on year.

The blistering result was backed by revenue growth across its voice and data services.

According to the CEO, Freddie Moolman, “voice revenue growth remained healthy at 8.4 per cent and accounted for 72 per cent of service revenue” as Nigerians continue to rely on GSM to contact loved ones and contract businesses. Voice traffic increased by 7.6 per cent supporting revenue growth” he continued.

MTN has also recorded an increase in data revenue which it ascribed to “greater population coverage, a revamp of our data portfolio and initiatives to drive 4G device penetration” adding about N219.3 billion in revenues only. Data contributed 18.8 to service revenue.

On FinTech, Moolman revealed the division’s revenue growth was 23.3 per cent supported by increased adoption of MTN Xtratime our airtime lending service.

The company VAS business rose from N32.2 billion to N37.1 billion and includes airtime lending and mobile money (Fintech), subscriber identification module (SIM) back up services and voice-based services. According to Moolman, MTN launched a super-agent service in August which helped increase their network of agents to about 108,000.

He also said “the Agent network served almost one million customers in the first four months of operation” just as it focusses on further expansions.

MTN also revealed plans to widen its FinTech service offering “from basic transfer service and airtime/data sales to a more extensive bouquet, including cash deposit and withdrawal services, bill payments and facilitating -e-commerce” it concluded.

MTN’s foray into the FinTech space has often been viewed as a game-changer in a very competitive and dynamic FinTech space. With its huge balance sheet and brand power, the company has a large cash pile that it can throw into space.

MTN’s technological assets give it more advantages and access to customers through mobile while banks are still expected to retain physical branches increasing its cost of operations. Nigerian Banks are also strictly regulated compared to other FinTech players who are allowed to innovate and create products without much regulation.