MTN Uganda has announced its plan to spin off its mobile money arm into a newly formed fintech company. The mobile money business, which includes payments and transfers, will be transferred from MTN Uganda to this new company, co-owned by MTN Group Fintech Holdings and a trust for minority shareholders. Following an Extraordinary General Meeting on 2 July 2025, MTN Mobile Money (U) will cease to exist as a subsidiary of MTN Uganda.
This move echoes the strategy adopted earlier by MTN Group and Airtel Africa, which separated their mobile money operations to enhance valuation and raise capital through partnerships or divisional funding. In MTN’s broader group strategy—including its deal with Mastercard—the aim was to capitalise on the fastest‑growing revenue segment via a standalone fintech focus.
What does this signal for Safaricom and M‑Pesa?
Safaricom remains publicly firm that it sees “no compelling case” to spin off M‑Pesa at present. CEO Peter Ndegwa has repeatedly emphasised that unless a split adds value for investors or customers, and unless it supports clear strategic objectives, Safaricom will maintain its integrated structure. Additionally, Kenyan regulators, including the Central Bank of Kenya, have been advocating for separation to enhance oversight. Safaricom, however, has cited potential tax liabilities (an estimated KSh 75 billion liability) and lack of a solid business case as reasons for delaying any move.
So where does MTN Uganda’s move fit in?
- Market validation of fintech valuation – MTN Uganda’s spin‑out may underscore the attractiveness of standalone mobile money ventures. For investors, fintech arms can offer stronger growth potential outside a traditional telco mix.
- Operational flexibility – Once separated, the new entity can seek external partnerships, raise capital, innovate, and pursue cross‑border expansions—perhaps more nimbly than a division constrained within a telecom.
- Competitive pressure – If spin‑offs consistently yield stronger valuations and fintech businesses thrive independently, Safaricom may eventually reassess its position—especially if peer value creation becomes evident.
That said, there are compelling reasons Safaricom might choose to hold firm:
- Subsidiary structure today – Separating M‑Pesa would trigger substantial tax and regulatory considerations, as Safaricom has noted.
- Regulatory oversight – While regulators prefer more direct supervision of mobile money, Safaricom could respond through internal governance reforms and group‑level structures.
- Revenue and ecosystem integration – M‑Pesa currently contributes around half of Safaricom’s group revenue, and supports a broad ecosystem that includes credit, savings, merchant payments, and digital services—all tightly woven into the telecom platform.
MTN Uganda’s spin‑off will certainly add momentum to the mobile money-as-fintech narrative in East Africa. Should the new fintech company demonstrate strong growth, draw investment, and partner successfully, the case for separation will only strengthen for other providers—including Safaricom.
