Telecommunication companies in Nigeria are gearing up to challenge the dominance of fintech operators in the mobile money space.
They are therefore listing their fintech arms in the capital market to raise money for the competition.
MTN and Airtel, with an 86.26 percent market share of mobile connections, are preparing Initial Public Offerings (IPOs) to raise capital and accelerate growth.
This move comes as fintech players like OPay and PalmPay continue to lead Nigeria’s mobile money surge. In 2024, they led the country’s mobile money haul of N79.55 trillion, which represents 69.58 percent increase from 2023. Since 2020, mobile money transactions in Nigeria have surged by 2,507.94 percent.
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While fintechs have thrived, telco-led mobile money platforms have struggled, a contrast to what is happening in other African markets like Kenya and Ghana where telco-owned entities are dominating the space.
MTN’s MoMo Payment Service Bank saw a 60.29 percent increase in customer deposits, rising to N6.16 billion as of March 2025, up from N3.84 billion in the same period in 2024. However, active wallets fell from 4.8 million to 2.1 million.
Airtel’s SmartCash in Nigeria recorded $2 million in revenue in the first quarter (Q1) of 2025, a notable jump from zero in Q1 2024, with a customer base of 1.7 million. Yet, these numbers remain modest when compared to the fintech leaders.
PalmPay’s revenue stood at $63.90 million in 2023, a 31,850 percent increase from the $0.20 million it generated in 2020. While OPay’s revenue numbers are undisclosed, it recorded 10 million daily active users and 100 million daily transaction volumes in 2024.
“The growth of non-MNO-led mobile money providers (OPay and PalmPay) in Nigeria has driven financial inclusion,” said GSMA, the industry body for telecom operators.
To compete, telcos are turning to the capital markets. In 2021, Ralph Mupita, MTN Group chief executive officer, said: “No decision has been made as yet, but listing will be an option considered if that will be the best approach to unlock value.”
MTN Group recently announced plans to spin off its fintech business in Nigeria, Ghana and Uganda in the Q1 of 2025. As part of this move, Mastercard is set to acquire a minority stake valued at up to $200 million, valuing the unit at $5.2 billion.
This separation effort has been in the works since 2023, with MTN Group saying in its Q1, 2025 results, “The structural separation of our fintech business continues to progress, where the process is well-advanced to secure shareholder and regulatory approvals in key markets. Completion of these important milestones will enable the operations to satisfy regulatory requirements and the faster growth of the businesses, boosted by strategic partnerships.”
Airtel, on its part, sold a $100 million minority stake in its mobile money unit to Mastercard. It is now preparing for an IPO in the Q1 of 2026.
“We are making significant progress in our preparations for the Airtel Money IPO and remain committed to this objective. However, we are also mindful of evolving market conditions. Therefore, subject to these conditions, we anticipate a listing event in the first half of calendar year 2026,” said Sunil Taldar, CEO of Airtel Africa.
Despite the capital and infrastructure telcos bring, coupled with these IPO plans, experts argue that winning in the mobile money space will require more than cash. “The main thing is about relevance,” said Ibirogba Oluwagunwa, chairman of the Lagos Chapter of the Association of Mobile Money & Bank Agents in Nigeria (AMMBAN). “How many people will trust them? What other benefits are they offering that others aren’t already providing?”
He argued that while going public is a bold step, telcos must go beyond basic transactions and focus on trust, functionality and presence in unbanked areas. “The space is not about hype, it’s about relevance in rural and underserved areas,” he said.
While Nigeria’s mobile money space is driven by both mobile network operators (MNO)-led and non-MNO-led providers, they are subject to different types of licences, which allow some similar activities, but differ in what each can offer.
Telcos’ mobile money arms operate under the Central Bank of Nigeria (CBN)’s Payment Service Banks (PSBs) license, which mandates that 25 percent of operations target rural areas. While designed to support financial inclusion, this license comes with limitations, such as a minimum capital requirement of N5 billion and restrictions on offering services like loans.
Non-MNO-led fintechs have a lower capital threshold of N2 billion. According to GSMA, “higher capital requirements and rural operation mandates” for PSBs may be a key reason telcos lag behind fintechs. It added that regulatory restrictions reduce competition and limit the broader impact on financial inclusion.
However, Oluwagunwa believes that telcos can spin this to their advantage. “Unbanked areas need more than hype. It is about accessibility and ease there,” he emphasised, noting that telcos can leverage existing infrastructure in rural areas.
Another industry expert suggested that IPOs may not be about raising a war chest. “They already have that,” the expert noted. Instead, it could be a strategy to spread and diversify risk.
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“These fintech arms have struggled to gain momentum, and listing could be a way to restructure and reposition.”
When telcos started getting PSB licenses in 2018, many expected them to translate their national coverage to fintech momentum. “Having the infrastructure is quite different from having the innovation,” noted Oluwagunwa of AMMBAN.
Despite initial hiccups, telcos remain optimistic. “It was essential to establish a sustainable growth trajectory for our MoMo PSB ecosystem,” said Karl Toriola, MTN Nigeria CEO.
According to GSMA, the telcos’ capital, reach, and technology give them the potential to scale. But achieving that may depend more on regulatory reforms than IPOs. “Allowing mobile money providers to provide new services such as micro credits can further accelerate financial inclusion and contribute to the economy,” It added.
