MARKET ANALYSIS | Telcos to Fintechs – How and Why Africa’s Telco Giants are Spinning Out into Independent Fintechs

Across Africa, the rise of mobile money and digital payments is reshaping the financial landscape – and the continent’s largest telcos are doubling down.

Faced with surging demand for low-cost, mobile-first financial services, telecom operators are spinning off dedicated fintech subsidiaries, raising capital, securing licenses, and positioning themselves as the next wave of pan-African financial powerhouses.

Why Telcos Are Becoming Fintechs

Africa’s telecom sector has long played a key role in financial inclusion. Mobile money services like MTN MoMo and Airtel Money have helped millions across the continent gain access to basic financial tools in the absence of traditional banking infrastructure.

But today’s shift is more structural – and strategic.

Instead of running payments divisions as side businesses, telcos are increasingly spinning off fintech units as separate regulated entities. This allows them to:

• Raise independent funding
• Unlock valuations in high-growth fintech markets
• Meet central bank licensing requirements
• Partner with banks, startups, and regulators more effectively
• Focus on innovation outside legacy telecom structures

MTN Group: MoMo Rising

South Africa’s MTN Group has been leading this shift.

Its Mobile Money (MoMo) platform was spun off into a standalone business, MTN Fintech, now operational across over 15 countries. In 2022, the company announced it was targeting a valuation of $5 billion for its fintech arm, with plans to bring in strategic investors.

By 2024, MTN Fintech had:

• 63 million+ active MoMo users across Africa
• Over 15 countries with live MoMo services
• 1.6 million+ agents and 500,000 merchants
• $250 billion+ in transaction value processed annually
• Revenue growth: Fintech revenue grew 20–25% YoY in recent quarters

with global players like Mastercard and Flutterwave, while pushing aggressively into merchant payments, remittances, lending, and insurance.

MTN MoMo is live in high-growth markets like:

• Nigeria (under the Payment Service Bank license)
• Ghana (where MoMo is a dominant digital payment method)
• Uganda, Cameroon, Côte d’Ivoire, Zambia, and more

In several of these countries, MTN Fintech is not only leading in mobile money penetration but is also moving into adjacent services like insurance, credit scoring, and international remittances.

Regulatory wins have also been key: MTN MoMo secured Payment Service Bank (PSB) licenses in Nigeria, and e-money licenses in countries like Uganda and Ghana.

In 2021, MTN Group formally separated MoMo into a standalone fintech subsidiary, MTN Fintech. The goal was clear:

“To structurally separate our fintech and fiber businesses to unlock value and attract strategic investors.” – Ralph Mupita, MTN Group CEO

This move allows MTN to:

• Comply with local financial regulations (especially in Nigeria, Ghana, Uganda)
• Form partnerships with global financial players
• Pursue IPO or external investment without diluting the parent telco
• Integrate fintech more deeply with its data and AI capabilities

While MTN hasn’t yet listed MTN Fintech, CEO Ralph Mupita has signaled that an IPO or private capital raise is likely within the next 1–2 years, depending on market conditions.

Airtel Africa: Fintech Listing in Sight

Rival Airtel Africa has made similar moves.

Its Airtel Money business was carved out as Airtel Mobile Commerce in 2021 operating independently with its own CEO and governance structure.

This strategic spin-off allows Airtel to:

• Attract external fintech capital while retaining control
• Meet central bank requirements for non-telco ownership of financial services
• Create a clear path to IPO or strategic exit
• Accelerate partnerships across banking, payments, and digital lending

In 2021–2022, Airtel Africa raised over $500 million for its fintech unit from investors including Qatar Investment Authority and Mastercard, valuing the business at $2.65 billion.

“We remain committed to eventually listing the mobile money business, once market conditions permit.” – Segun Ogunsanya, CEO, Airtel Africa (2024)

By 2024, Airtel Mobile Commerce had:

• 37 million+ active Airtel Money users
• Live in 14 markets, including Kenya, Uganda, Tanzania, Zambia, Malawi, and DRC
• Over $110 billion in annual transaction value
• Fintech revenues up 30% YoY, contributing 15–20% of total group revenue
• 450,000+ agents and merchant points

Airtel Money is now active in 14 African markets, and in 2024, the company reaffirmed its plan to publicly list the fintech unit, signaling investor appetite and strategic clarity around the business.

Safaricom & M-Pesa Africa: Regional Expansion

Kenya’s Safaricom, which pioneered mobile money globally through M-Pesa, has also joined the movement.

In partnership with parent company Vodafone, Safaricom created M-Pesa Africa, a separate joint venture to scale the service beyond Kenya.

By 2024, M-Pesa Africa had:

• 60+ million active users across Africa
• $320+ billion in annual transaction volume (2023)
• Available in 7 countries: Kenya, Tanzania, Mozambique, DRC, Lesotho, Ghana, and Egypt
• Over 600,000 agents and 500,000+ merchants
• Generates over 40% of Safaricom’s total revenue
• M-PESA App installed by 10M+ users

M-Pesa Africa is already live in 7 countries, including Tanzania, Mozambique, and Ghana, and is investing heavily in new services like M-Pesa GlobalPay, API integration for merchants, and cross-border payments.

Some of its strategic partners include:

• VISA: To power virtual cards and global digital payments
• Western Union and WorldRemit: For inbound remittances
• Google: M-PESA integration into Google Play Store
• Safaricom Ethiopia: M-PESA launched commercially in Ethiopia in 2023, marking a key regional expansion milestone

As of 2024, Safaricom has not announced formal plans to spin off or IPO M-PESA Africa. However, analysts and investors speculate that:

• M-PESA could be valued between $8B–$10B if listed independently
• A spin-off or partial listing could allow Vodafone and Safaricom to unlock value while expanding regional operations
• An IPO may follow once M-PESA’s expansion in Ethiopia, Egypt, and West Africa gains maturity

While M-Pesa hasn’t spun out into an entirely independent company yet, the structural shift toward regional fintech consolidation is clear.

“Our mission is to be the continent’s preferred digital payments platform — one API, one experience, one Africa.” – Sitoyo Lopokoiyit, CEO, M-PESA Africa

Orange, Ethio Telecom & Others: Joining the Trend

Other African telcos are following suit:

• Orange Money is now managed under Orange Middle East and Africa’s Orange Bank Africa, focusing on West Africa and Francophone markets like Côte d’Ivoire and Senegal.
• Ethiopia’s state-owned Ethio Telecom launched telebirr, its own mobile money service, in 2021 – and is reportedly considering spin-off and licensing options as mobile finance demand grows.

Ethio Telecom, Ethiopia’s state-owned telecom monopoly, launched Telebirr in 2021 to spearhead the country’s digital financial transformation. In a market where over 65% of the population remains unbanked, Telebirr is fast becoming one of Africa’s largest mobile money platforms — by user base — in just three years.

Telebirr by the Numbers (2024)

In terms of untapped market potential:

• Ethiopia has 120M+ people, but less than 35% financial inclusion
• Mobile phone penetration: ~60%
• Ethio Telecom remains the dominant telco, though Safaricom Ethiopia is a new entrant (and launched M-PESA in 2023)
• As of 2024, Telebirr holds over 90% market share in digital wallets

Orange Money, launched in 2008 by Orange Group, is one of the oldest and most geographically widespread mobile money services in Africa. With a footprint across 17 African countries, it has become a critical player in cross-border payments, digital wallets, and financial inclusion in Francophone Africa.

Orange Money by the Numbers (2024)

• 38 million+ active users
• Available in 17 countries across West, Central, and North Africa
• Over 120 million transactions monthly
• €100 billion+ (~$107B) in annual transaction volume
• €770 million in annual revenue from financial services (FY 2023)
• Employs over 40,000 agents and distributors

Orange runs its fintech business through two key vehicles:

1. Orange Money

   • Mobile money wallet, merchant pay, P2P, and bill services
   • Operates under Orange’s telco license + local regulatory approvals

2. Orange Bank Africa

   • Licensed digital bank (in Côte d’Ivoire, launched 2020)
   • Offers savings, credit, and account services
   • Expanding gradually across the UEMOA region

“We see mobile money and banking services as twin engines for financial inclusion and business transformation in Africa.” – Alioune Ndiaye, former CEO, Orange Middle East & Africa

Regulatory Push and Investor Pull

Africa’s central banks and regulators are playing a critical role in this evolution.

Countries like Nigeria, Ghana, Uganda, and Egypt have introduced dedicated licensing regimes for mobile money operators and digital banks, encouraging telcos to formalize and separate their fintech operations.

At the same time, venture capital and strategic investors see African fintech as one of the continent’s most scalable, resilient, and impactful sectors. By spinning off fintechs, telcos can tap into this funding stream without diluting their core telecom business.

What’s Next?

The next phase of growth will likely center around:

• Interoperability between mobile money platforms
• Cross-border remittances and trade finance
• Merchant payments and QR-code adoption
• Credit, savings, and insurance products built on telecom data
• API-driven ecosystems, enabling developers to build on telco-fintech rails

As competition intensifies, standalone fintech arms give telcos the agility and focus needed to evolve beyond payments into full-fledged financial platforms.