MTN and Ericsson review MoMo footprints contract in Africa

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Mtn And Ericsson
Mtn And Ericsson

MTN and Ericsson have renewed their partnership contract to enhance mobile financial services and financially empower millions of citizens across Africa.  

Per a statement on MTN’s website, the renewed partnership will see MTN’s Mobile Money (MoMo) service integrated with the Ericsson Wallet Platform, to allow Ericsson Wallet users to manage funds, pay merchants and utility providers, and access loans and insurance services with MTN MoMo.

Head of Mobile Financial Services at Ericsson, Michael Wallis-Brown said “We’re touching 10% of the market in Africa today, and we can get to 50% – that’s enormous growth for us.”

This is not the first time two telecom giants are working together. In 2019, they embarked on a five-year deal that launched the Ericsson Wallet Platform across several countries where MTN operates.

Currently, over 61.7 million individuals send and receive money through the platform. MTN MoMo’s transaction value has skyrocketed, nearly tripling from $76 billion in 2018 to $204 billion by 2022.

Given that Ericsson Wallet Platform has over 400 million registered mobile wallets globally, this partnership could further propel MTN’s MoMo growth.

MTN has been actively pursuing strategic partnerships in recent months to fuel its ambitious expansion goals. In August 2023, it sold a 30% stake in their MoMo fintech arm to Mastercard and partnered with Saana Capital, an international cross-border payment provider, to enable bill payments and international transfers across Africa.

Some industry watchers believe these moves by MTN pose a further threat to other Fintech industry players on the continent, who are already heavily dwarfed by MTN in terms of market share.

Ghana

In Ghana, for instance, MTN Mobile Money commands up to 90% of the mobile finance revenue in the country while other players, including the fintech wings of the legacy telcos are struggling for crumbs.

MTN Ghana is the only named significant market power (SMP) in the country, but that does not affects its mobile finance operations. Some industry watchers have therefore suggested that MTN Mobile Money should also be named an SMP for certain regulatory interventions to apply before competition is completely dwarfed out of the market.

But it also holds true that while MTN Mobile Money was taking the risks to invest in the space without any return (in fact incurring loses) for over six years, the legacy telcos just sat by, watched and waited to cash in on the failures of MTN.

In fact, one of the telcos, Vodafone Ghana, even rubbished MTN’s approach and boasted of holding the mobile money blueprint, which they never implemented until several years later when MTN had already penetrated the market and gained control of more than 90% of the market.

The smaller, non-telco, fintechs in the space also came in riding on the back of the infrastructure and public confidence MTN had built in mobile money to then innovate around the market created my MTN to make earnings.

So, it will probably be counterproductive to the country’s drive for investors to then begin to penalize companies like MTN, which have over the years continued to believe in and invested in Ghana while others kept on with their industry-gazing strategy.

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