build the largest most valuable platforms
TRANSCRIPT
Leading digital solutions for Africa’s progress
Build the largest most valuable platforms
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Fintech and digital services
MTN digital & fintech vision
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The leading digital platform of Africa; unlocking economic growth through financial and digital solutions for consumers and businesses
Kafui lives in Takoradi (Ghana). She uses MoMo tomanage her business and payments; she also sellsher products online with MoMoMarket.
She took a business loan with MoMoAdvance andinvested it in buying new products to support her community.
She used aYo to insure her inventory and reduceher business risks.
She sends money and often shares “wisewords”(a local ayoba content channel) to her son who isstudying in Cape Coast.
She is the leader of an ayoba group chat wherelocal small shop owners coordinate to buy productsin bulk at reduced prices.
She enjoys listening to one of ayoba’s church channels on weekends and watches live Sunday functions on ayoba when she travels to Accra for business.
Meet Kafui
Building on a scaled wallet platform and network
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Integrated messaging, fintech, e-commerce and digital content platform
Free
messaging
Deposit, withdraw
Payment and e-commerce
Nano loan and insurance
Digital content
Local P2P and
international remittance
Wallet & paymentData scoring & analytics
InsurtechE-commerce & loan
Subscription & Content distribution
API & managed services
Integrated Platforms
Integrated ecosystem partners
Banks & InsurersMoney transfer operator
Agent & logistics networksDevelopers & Fintechs
Payment networksContent providers
Payment acceptance and ecosystem payments
Customer engagement
and messaging
Micro loans & insurance
Distribute content
BusinessesConsumers
Online store front management
API
Delivering through a BOLD strategy
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Accelerate the growth in MTN territories through excellent delivery and evolve to a full OTT play
B o L DBiggest Fintech & Digital platformin Africa
• Launch in key markets
• Increase in MTN base
• Accelerate payment
• Compliance focus
• MVNO model
• Rapid growth through partnerships
Operate like an OTT
• Create TopCo to expose value
• Evolved technology
• OTT operating model
• Acquire new talents
• Acquire non MTN customers
Leverage MTN’s core business and assets
• Digitize distribution
• Enable device lending
• Accelerate prepaid airtime payments
• Airtime as a reward
• Rapid OTT adoption with free data
Deliver6 unicorns
Wallet
Payment &E-commerce
Banktech
Insurtech
Remittance
ayoba
Delivery level
Securing several partnerships to ensure success
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Accelerate delivery to the market and scale rapidly through our partners
Insurance technologylicenses
Insurance expertisenetwork
Payment Gateway technology
e-commerce technologye-commerce expertise
Merchant tool technology
Banking licencesCapital
Risk Sharing
Remittance licensesRemittance operation
Remittance technologyNetwork
InsurTech Banktech RemittancePayment & e-commerce
Partnership scope
Unique assets to leverage the opportunity
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Competitive advantage due to scaled fintech platform, GSM customer base and Africa’s most valuable brand
PEOPLE & EXECUTIVE
EXPERIENCE
BROAD DISTRIBUTION
NETWORK
SCALED FINTECH
ECOSYSTEM
AFRICA DNA & USER
KNOWLEDGE
Comprehensive understanding of user
needs in Africa
EXTENSIVE REACH & TRUSTED
BRAND
Multi-channel access to large userbase
Established agent presence in key
markets
Already scaled in several key markets
Unique experience combination in key
industries
Leveraging Africa’s largest mobile network operator enabling fintech and ayoba to have unique propositions
Five MTN differentiators in the African market
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Fintech
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The opportunity &market growth
Ambition2025
Fintechtoday
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Leveraging our assets, building Africa’s largest & most valuable fintech player
100monthly active MoMo users to
million
20%Fintech contribution to MTN service revenue
47 active MoMo users in16 markets
million
R13.6 revenue in 2020, growth of 23.9%*. Contributes 8% to MTN Group service revenue
billion
US$25^billion
Opportunity
Market opportunity
95% of payments remain cash based with 90% of economies driven by small business
75% of Mobile Money users still do not have access to loans, Nano loans for business remain untapped
US$150 value of transactions in 2020, up 86.6% in Q1 2021
billion
16 567 transactions per minute, up 46.7%in Q1 2021 2.6% Insurance penetration in
Sub Saharan Africa
750Annual transaction value US$
billion
^R350 billion - key value poolsSource: Market sizing: internal desktop research, delta partners market sizing
On track to be the largest fintech player in Africa
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Our ambition is to go beyond traditional telco-led Mobile Money play
Number of markets (#)
Number of MAU (#m) 46 to 50m 21m 22m 47m
9 14 18 16
2020 Overview
vv
Ambition is to move beyond the traditional telco-led MoMo with the OTT super app ayoba
Payment focused and OTT players
Social media payments &super apps
Ecommerce and lifestyle platform
We expect to be #1 telco-led wallet before end of 2021
Source: Competitor benchmark: desktop research and MTN internal
Unpacking MTN fintech markets
MTN has scaled user and transaction penetration, secured licences and deployed local operation
Financialservice account %^^
Credit card penetration %^^
Region Country
Insurance penetration %^^
29%
60%
25%
36%
25%
16%
3%0.4%
3%
1%2%
1%
Southern Africa
Central Africa
Western Africa
Eastern Africa
South Africa
Zambia
eSwatini
Nigeria
Ghana
Cote d'Ivoire
Guinea C. + B.
Benin
Liberia
Cameroon
Congo
Uganda
South Sudan
Rwanda
Population #m
59
18
1
200
30
27
15
13
5
26
5
44
11
13
42
Active MTN wallet #m
0.3
3.6
0.5
5.0
10.5
5.0
1.3
2.8
0.7
4.0
1.7
8.4
-
3.5
0.0Sudan
MTN Tnx value / GDP
0%
20%
16%
0%
120%
23%
10%
64%
38%
25%
5%
40%
0%
67%
0%
Western
Central
Eastern
Southern
Fintech licence status
Bank led
Telco led
Telco led
Super Agents
Telco led
Telco led
Telco led
Telco led
Telco led
Telco led^
Telco led^
Telco led
Telco led
Telco led
Telco led
^In application
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^^ Data.worldbank.or, internal MTN desktop research, DELTA partners
Blueprint to reach 100m active wallets by 2025 | Opportunity US$4.3bn
Continue penetration within existing MTN base | Access to non-MTN subscribers in existing markets | New markets
• Move penetration from 40% → 70% within MTN GSM base
• Win in Nigeria with the right approach on PSB set up; anddeploy full MoMo product offeringand ecosystem
• Grow and expand in new markets
• Advance service growth by enabling recurring usages
• Open MoMo to non MTN users with MoMoApp and ayoba
MoMo Monthly Active Users (MAU)
Strategy overview and focus
47 million
58 766 001
77 435 013 84 185 119
94 337 918
>100 million
-
20 000 000
40 000 000
60 000 000
80 000 000
100 000 000
120 000 000
-
20 000 000
40 000 000
60 000 000
80 000 000
100 000 000
120 000 000
2020 2021 2022 2023 2024 2025
Nigeria SA WECA SEA MENA Total
wallet
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Well-positioned to seize payment & e-Commerce | Opportunity US$8.6bn
Largest and growing, merchant base | At-scale mobile wallet platform | Strong brand
Based on established operations, licence holdings
and mature relationships with regulators in 16 countries
Large distribution network of stores and agents, leveraged
to enable e-Commerce logistics
Scaled mobile wallet provides a captive consumer base for
merchants to leverage
In 2 years we have > 500k merchants using MoMoPay to accept payments, ambition to reach 3 million in 2025
Highly recognised & trusted brand (#1 in Africa), builds trust in payments offering for merchants and consumers
Through the wallet, MTN offers a unique payment process with escrow as well as lending
Payment
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Prioritising BankTech value propositions | Opportunity US$7.8bn
Combining data wealth and scaled mobile wallet, we currently facilitate US$100m worth of loans per month
Live with own-solution in one market and through partnerships across five markets Aim to be live across all our markets by 2023
lending
MoMo Consumers MoMo Merchants MoMo AgentsMTN Consumers
MoMo-Advance(live in Uganda)
Merchant-Advance(planned Q3 2021)
Agent-Advance(Nigeria loading Q2 2021)
Airtime-Advance(planned Q1 2022)
Lending product embedded in the MoMo user journey
Targeting P2P, bill payment, and merchant payment use cases
Product leveraging merchant MoMo payment history and
merchant business turnover data
Loan on MoMo float availability during peak time & in remote area
Improving MoMo customer experience
Lending product for MTN consumers depleting airtime
Replacing existing partners and saving estimated US$200m p.a
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Gaining momentum on InsurTech venture “aYo” opportunity US$1.8bn
Ambition to become Africa’s #1 micro/mass insurance provider InsurTech
33mActive customers
US$ 455mRevenues
Full portfolioMicro, life, retirement, saving, general
2025 InsurTech ambitions
Current aYo overview
• 11.3m insurance policies sold since inception (6.7m active)
• 3 markets live | Micro hospital & Life Insurance
• To add 2 markets in 2021, including Nigeria
Strategy
• Expand in more countries
• Continue leveraging core MTN and fintech platforms
• Onboard Sanlam as a strategic partner to accelerate InsurTech
2021 development & strategy
We are onboarding Africa’s largest insurance company (Sanlam) as a strategic partner to accelerate InsurTech expansion and growth
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Leveraging our wallet, receiving over US$1bn p.a | Opportunity US$0.5bn
Targeting a 4x increase in our remittance volumes by 2025 Remittance
USUS$11bn
UEUS$25bn ME&A
U$18bn
RegionalUS$14bn
Remittance potential
• Remittance to SSA growing >10% p.a. and currently estimated at US$55 billion p.a.
• Within Africa formal remittance estimated at US$14 billion p.a and growing with regional economic integration
Where we are today
• Opened >30 regional corridors enabling customers to send/receive funds to/from courtiers in SSA
• >50 partners including world remit, Western Union, money gram sending traffic
• Receive >US$1 billion international remittance p.a.
• Send >US$100 million p.a
• Launched our own remittance App “Homeland” in UK
Continue to grow ecosystem partners and regional corridor through standards tech and commercial
Launch inbound remittance in Nigeria contributing to 40% of total inbound remittance to SSA
Drive aggressive pricing on Homeland and launch in Europe & US
Use Airtime and Data as well as synergies with the core telco to drive volumes
Regional and inbound remittance potential Our strategy
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1717
Structural separation of fintech business to deliver ambitions & reveal value
Q1 2022
Local Opco set up• Local Opco licences• Companies set up• People and process separation • Customer ownership• Accounting separation
TopCo set up• TopCo company set up• Technology separation• Central operation and service set up• People and process set up
Fintech consolidation• Transfer of ownership• Accounting consolidation
Transaction• Strategic partnership• Investment
• Enabling operating model
• Attract strategic partners
• Comply with local regulations
• Reveal value
• Engagement with potentialstrategic partners
• Countries specific most efficientconsolidation path
Rationale
Ongoing assessment of key considerations
Our 2025 Ambitions
100 million active MoMo users
Leverage 1st Wallet unicorn to unlock
+ 4 new unicorns(Payment, Insurtech, Banktech, Remittance)
Grow and expand beyond MTN customers and markets
>20%contribution to MTN Group service revenue
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Digital & ayoba
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2020
ayoba is our platform to harness Africa’s unique digital ecosystem & context
Triple play of free messaging, content distribution service and e-Commerce powered by an open platform
Content and channel servicesGlobal & local content distribution & Go To Market leveragingglobal brand & local presence
Free messaging suiteSupported by free data, a full messaging service including groups,media sharing, voice notes, SMS continuity, VoIP and video calling
Social-CommerceIntegrate fintech as a financial service & payment methodto enable ayoba to be a digital market place
Open platform
Opening of platform to 3rd party services delivered via
channels,BOTs and app
in app
The African Digital economy catalyst
We aim to reach 19m MAUs by 2021 and 100m by 2025
Our plan is to leverage MTN existing base to scale up quickly and then grow as OTT player in new markets
Launched in 20 countries
Gaming MoMo Micro apps
MusicChannels
Messaging
Voice & VideoFree data
Jun 2019
20212020
435k2,2m
5,5m
2023
App of the Year
Monthly active users
Product expansion
19m
41m
2025
100m
Premium content
App in App
E-commerce
OTT play
Leverage MTN data & Fintech
OTT play inbig African markets
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The opportunity &market growth
Ambition2025
ayobatoday
The ayoba platform aims to harness growth in the African digital economy
100Grow active monthly ayoba users to
million
5.3 ayoba users in 20 markets
million
20 Markets
US$8.5^billion GMV
Opportunity
Market growth
475m Mobile data connections by 2025
3.9% GDP of the digital economy today
US$1Capture >10% of the
GMV of the digital economy to reach
billion
5 In-app services
71% Smartphone penetration by 2025 vs 45% today
^R118bn – key value poolsSources: GSMA, Statista, Delta Partners analysis
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The digital economy opportunity in SSA
Enablers for a digital economy in Africa are aligned to enable a strong acceleration in the next 4 years
45% of mobile connections are
smartphone users
Expected to growto 71% by 2025 driven
by decline in device prices
Mobile data connections in SSA to grow 3 fold by 2025 to
reach 475m
Driven by network expansion & data cost
reduction
Acceleration of smartphone penetration
Acceleration of mobile data penetration
Digital economy is only 3,9% of the GDP
Build up of digital economy
value chains
Big digital players address big markets
first
Localisation is still required to succeed
on the continent
Success in digital in Africa requires
localisation
Content not bound to traditional channels,
with mobile & PC capturing 85% of
video consumption in Nigeria.
E-commerce growing very fast
Digitalisation of services &
e-Commerce
Significant potential for a Super-App to capture the African digital opportunity Network & distribution assets enable a unique opportunity to become Africa’s Digital Giant
Large potential of digital services
by 2025
Digital content distribution shows a R118bn market size for MTN on the main
verticals
Sources: GSMA, Omdia, TeleGeography, Delta Partners analysis
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US$8.5bn^^Total market size in MTN footprint, excl. fintech, Delivery, 2025
>10%,R10-15bn
% GMV, Absolute value GMV captured in ayoba, excl. fintech, Delivery, 2025
Capturing a large share of the GMV^ of the Digital Economy
Main verticals covered by the app have a total market potential of R118 billion
Aim to capture >10% of the GMV of the digital sector in our footprint toreach R10-15bn GMV (~US$1bn) by 2025
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29 13
27
8
26
8
17
4
13
2
6
48
118
2020 2025
Music
E-Commerce
Gaming and e-Sports
Video
E-Health
E-Learning
Digital services revenue evolution within the MTN footprint (Rb)
^ Gross merchandise valueSources: GSMA, Statista, Delta Partners analysis 4
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Development phase of ayoba is organized around 3 stages
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Completing stage 1 this year and stage 2 by 2023
OTHER E-WALLETS
ENRICHED COMMUNICATION (CONTENT, BUSINESS)
FREE CONTENT
MOMO ACCOUNT
FREE DATA MTN
INSTANT MESSAGING
FREE DATA ALL NETWORKS
MARKET PLACE
MVNO TELECOM OFFERING
OTT FINANCIAL SERVICES
Our 2025 Ambitions
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100 million active ayoba users
Enablers for a digital economy in Africa are aligning for a
strong acceleration in the next 4 years
Capture
>10%US$1 billion
GMV of digital sector
ayoba will capture this growth by
leveraging telco & fintech platforms
to reach
Take-aways
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REGULATION
COMPETITION
EXECUTION
Appropriate operating model to support ambition
Disruptions to current commercial model
PSB licence in Nigeria
• RAPID execution of 6 unicorns with integrated platform
• Strategic investment and partnership to support rapid growth
• Free Data & SMS continuity as differentiator
• Structural separation of fintech business • New operating model implemented together
with Topco Investment in technology, people & strategic partnerships
• Engagement with regulators and partners
Key risks/limitations mitigated through deliberate interventions
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We have a clear plan to mitigate those risks, with the main actions well advanced
Fintech & ayoba
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Our vision is supported by 2 platforms
Fintech
Africa’sSuper platform
Africa’sSuper App
WalletPayment & E-commerce
BankTechInsurTech
Remittance
Instant MessagingMultimedia content
Lifestyle applicationsDigital services
Social commerce
The combination of ayoba and Fintech platforms is a unique asset to harness Africa’s digital economy
DigiFin revenue ambition
30
Ambition is to grow and diversify revenue to contribute at least 20% of Group revenue over the medium term
DigiFin revenue composition
47%
6%
26%
1%
19%
0%
20%
40%
60%
80%
100%
120%
2020 2025
Wallet Payment and E-commerce BankTech InsurTech ayoba & digital
9% of MTN Service revenue >20% of MTN Service revenue revenue
• 100 million active wallet• Continue leveraging MTN and succeed
in Nigeria
• 3 million active merchant• Successful implementation of product
roadmap
• US$4 billion loans per month• Successful execution of Banktech roadmap
• US$4 billion annual remittance volume• Continues volume growth through partners
• 100 million ayoba MAU• Platform to distribute digital content and
service
• ~60 million policies• Successful execution of product roll out• geographic expansion with new strategic
partner
Investment in technology and skills to support executionStrategic partnership to enable RAPID scale for each vertical with tailored operating modelEBITDA^ margin ~30% and capex intensity <5% to remain stable over the period
^ EBITDA subject to change with structural changes of Fintech business
a global team, passionate about Africa and committed to unlock the full potential of the Digital economy
MTN DigiFin leadership
Serigne from Dakar to Joburg
Elsa from Roma to
Lagos
Phrase from Kampala to
Joburg
Etienne from Paris to Abidjan
Eli from
Ghana
Sam from
Eswatini
Komba from
Zambia
Chris from Kampala to Monrovia
Chantalfrom
RwandaTiemoko from
Mali
Alain from Cameroon
Aminata from
Conakry
Lynda from Cote
D’Ivoire
Cedric from Abidjan to
Joburg
Usorofrom
Nigeria
Andrew & Andrew from CPT &
Joburg
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Africa’s digital economy opportunity is untapped;
it is happening NOW!
We are delivering6 Unicorns; we are done
with one!
We are building Africa’s Super Platform and
Super App
Our proven InStartUp model gives us agility
and RAPID scale
$
Key take-aways
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Ambition 2025 DigiFin summary
475msmartphones
revenue opportunity
US$35bn
100mMAUs
30%of GDP moved
US$750bn+transactions
3mmerchants
Q1 2022full set up of
Fintech TopCo
>20%of MTN service
revenue by 2025