MTN Uganda, a leading telecom operator, has announced plans to separate its mobile financial services, known as MoMo, from its main telecommunications structure. This decision aims to create a new independent fintech company and enhance competitiveness in the growing financial technology market.
Plan for MoMo Separation
The proposed separation will enable both MTN Uganda and the new fintech company to pursue new ambitions across East Africa. MTN MoMo Uganda will become an independent market player, which is expected to strengthen its offerings and expand growth opportunities.
Regulatory Aspects and Shareholder Meeting
The transaction is subject to regulatory approval and a vote from the company's shareholders. The management, led by MTN Uganda CEO Sylvia Mulinge and MTN MoMo Uganda MD Richard Yego, held a strategic meeting with shareholders to discuss the separation details. The company stated: "Today, we will break it down further and answer shareholder questions as we seek their approval on the #MTNMoMo structural separation."
Financial Performance of MTN Uganda
MTN Uganda reported a 13.5% increase in service revenue, reaching $234 million. This growth was driven by strong performance in data and fintech segments, which grew by 32.5% and 18.4% respectively. Meanwhile, MTN MoMo, with over 60 million active users, has taken critical steps to strengthen its position in the region.
The planned separation of MTN MoMo from MTN Uganda reflects the growing trend towards independence of fintech companies amidst increasing popularity of digital payments and mobile financial services in Africa. This change may significantly impact the mobile financial services market in the region.
