MTN Group’s shares surged in Johannesburg after it moved a step closer to getting a licence to operate lucrative mobile money services in Nigeria.
The continent’s largest wireless carrier jumped as much as 19% and was up 13.7% at 11am, the highest since 2015. The stock is the year’s best performer on Bloomberg World Telecommunications Index.
The company received an in-principal approval form the Central Bank of Nigeria and will now work towards gaining final consent, according to a statement on Friday.
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MTN, Airtel Africa and other African rivals are expanding aggressively in mobile payment offerings to take advantage of falling data costs and tap hundreds of millions of potential customers who don’t have access to banking services. Nigeria and Ethiopia are two major markets yet to finalise regulatory approval for the services, though both have indicated a desire to do so.
The news could add a new leg to growth for MTN and Airtel Africa
The news “could add a new leg to growth for MTN and Airtel Africa — having waited years for full licences in their biggest market by revenue — with both companies ready to launch mature technologies and processes”, John Davies, an analyst at Bloomberg Intelligence, said in a note. “Mobile money can make up as much as a third of sales in some markets.”
Nigeria has become a hotbed for homegrown online payment companies, with Flutterwave and Interswitch among start-ups to have achieved so-called unicorn status, or a valuation above US$1-billion.
MTN values its mobile money arm at about $5-billion and will consider a listing of the division, CEO Ralph Mupita said last year.