Mobile operator MTN Uganda accelerates plans for a separate division focused on mobile money services, aiming for the split to take effect before the anticipated July shareholder vote.
MTN Uganda to Separate Mobile Money Arm in Response to Regulatory Demands
MTN Uganda, one of the leading telecommunications companies in Uganda, has announced plans to separate its mobile money arm, MTN Mobile Money Uganda Limited (MTN MoMo), from its core telecom business. This decision comes in response to Uganda's National Payment Systems Act 2020, which requires mobile money providers to operate as separate legal entities.
The separation move is part of MTN Group's broader fintech strategy and is intended to unlock value in its fintech operations. The Extraordinary General Meeting for the separation of MTN MoMo from MTN Uganda is scheduled for July 2, 2025.
The structural separation aims to create a new independent fintech company majority-owned by MTN Group Fintech Holdings B.V., operating separately from the telecom operations. This move is expected to enhance operational focus, accelerate growth, and improve service delivery within the mobile money and fintech space.
Section 48(1) of Uganda's Payment Systems Act states that a payment service provider shall establish a subsidiary legal entity. In compliance with this requirement, MTN Uganda is taking this step to ensure regulatory compliance across multiple markets.
The transaction is part of MTN Group's Ambition 2025 strategy and is subject to receiving all required regulatory approvals and meeting customary conditions. The goal is to finalize the transaction by mid-2025.
It is worth noting that Section 55(2) of Uganda's Payment Systems Act prohibits the use of airtime as electronic money by electronic money issuers. This separation will allow MTN Uganda to comply with this regulation more effectively.
After a transitional period, the new company will allow MTN Uganda shareholders to hold stakes in both the telecom and fintech entities separately. The next major milestone after this separation is to list the new fintech company on the Uganda Securities Exchange within three to five years.
This spin-off is part of MTN Group's effort to unlock value in its fintech operations and aligns with its broader fintech strategy. The company believes that this move will position it well for the future, enabling it to capitalize on the growing fintech market in Uganda and beyond.
[1] Kenyan Wall Street, "MTN Uganda to Separate Mobile Money Arm," [accessed 2023-03-20]. [2] Kenyan Wall Street, "MTN Uganda's Mobile Money Arm Approved for Separation," [accessed 2023-03-20]. [3] Kenyan Wall Street, "MTN Uganda's Mobile Money Arm to List on Uganda Securities Exchange," [accessed 2023-03-20]. [4] Kenyan Wall Street, "MTN Uganda's Mobile Money Arm to Operate Separately from Core Business," [accessed 2023-03-20].
- The decision by MTN Uganda to separate its mobile money arm, MTN Mobile Money Uganda Limited (MTN MoMo), from its core telecom business is a strategic move to enhance operational focus, accelerate growth, and improve service delivery within the mobile money and fintech space, demonstrating a focus on technology and business innovation in the finance sector.
- In compliance with Section 48(1) of Uganda's Payment Systems Act, MTN Uganda's separation of MTN MoMo into a new independent fintech company is part of its strategic fintech plan, aiming to unlock value from its fintech operations and aligning with its broader fintech strategy, fostering growth and financial inclusion in the technology-driven finance business.
