MTN Group: Connecting Africa - [Business Breakdowns, EP.109]

This is Zack Fuss, an investor at Irenic Capital, and today we’re breaking down MTN Group. MTN is the largest mobile network operator in Africa and one of the 10 largest in the world. It has over 270 million subscribers, operates in 20 different markets, and is also one of the largest FinTech’s in the continent. To break down MTN, I’m joined by Benjamin Isaac, founder and Chief Investment Officer at Brizo Capital. We unpack their mobile money business in some detail, contrast the development of Telcos in Africa with what we’ve experienced in the US, and explore the competitive dynamics of operating in Africa. Please enjoy this breakdown of MTN. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. ----- This episode is brought to you by Tegus. Tegus is the modern research platform for leading investors. Stretch your research budget with flexible expert calls you can trust. At a fraction of the cost of traditional expert networks, Tegus customers pay only what an expert charges – with zero markups and no confusing call credits – netting an average 70% savings. Don’t want to conduct a full hour call? Tegus offers the ability to schedule 30-minutes, an offer you won’t find anywhere else. And they don’t stop there. With white-glove custom sourcing for every project and robust compliance measures, including a dedicated 50+ analyst team that vets every call transcript, Tegus ensures your privacy and protection. As the industry innovator for qualitative insights, Tegus helps you find the right experts you need at a quality and speed that can’t be matched. For a limited time, as a listener, you can trial Tegus for free by visiting tegus.co/patrick. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke Show Notes (00:02:24) - An overview of MTN Group today (00:04:13) - Contextualizing the scale and trajectory of the business vis-à-vis its strong African demographic (00:05:52) - MTN Group’s unique position in the value chain (00:10:37) - The origin and the evolution of MTN Group (00:13:19) - The business’ current and future revenue models and how they differ domestically and internationally (00:15:52) - Comparing ARPU in North America and Africa (00:18:03) - His take on why the international fintech market is developing as rapidly as it is (00:22:48) - Understanding use cases for MTN Group’s mobile money products (00:27:57) - The low market share held by credit card companies in Africa, and the opportunity it represents for MTN Group (00:29:07) - Regional differences, local competition, and the overall market structure (00:30:42) - The architects, visionaries, and capital allocators behind MTN Group (00:34:33) - What structural separation means for a business like MTN Group (00:36:31) - Measuring the size and scale of the business (00:38:53) - Investing in emerging markets (00:42:59) - The importance of location in a mobile fintech company listing (00:45:09) - Risks and challenges facing MTN Group (00:49:53) - How African mobile and fintech markets fared during COVID (00:51:23) - Framing the business’ current and future picture of profitability (00:56:23) - Lessons learned in studying the story of MTN Group