MTN Group to Bring e-Commerce Services to African Markets

MTN Group today announced from Johannesburg today,in a Press Release, that it has gone into partnership with Rocket Internet and Millicom International Cellular to develop internet businesses in Africa, a strategic move which should enable one of Africa’s leading mobile telecoms operators to extend online retail and other essential digital services on the African continent.

Te new venture to be called Africa Internet Holding (AIH) will be jointly held by the three companies with equal ownership, at 33.3 percent. MTN Group CEO and President, Sifiso Dabengwa, said “We are excited to engage in a strategic partnership with Rocket Internet and Millicom to develop online ventures across the fast growing internet markets of Africa. Rocket Internet’s proven successful track record, coupled with Millicom and MTN’s leading mobile telecommunications position, will allow the partnership to capture the growth potential of the digital media space across our footprint in the region”.

Founded in 2012 as a joint venture between Rocket Internet and Millicom International Cellular, AIH is a leading internet group in Africa, with presence in 13 countries on the continent, including South Africa, Nigeria, Egypt, Morocco, Cote d’Ivoire and Ghana. The company has developed several successful e-commerce ventures in the last 18 months, including Jumia, Zando, Kaymu, Jovago, Lamudi, Carmudi, Easytaxi and Hellofood.

Millicom President and CEO, Hans-Holger Albrecht, commenting on the development said:

“We are pleased to welcome MTN as a strategic partner to accelerate the growth of our online alliance in Africa. It is a significant vote of confidence in its future. Between us we have more than 220 million mobile customers in the continent with very limited overlap. MTN is the leader in Nigeria and South Africa, the largest markets for AIH currently, while Millicom contributes through its leading positions in our markets, combined with one of the most innovative product offerings.”

For Rocket Internet, Oliver Samwer, Co-Founder said “The strategic partnership between Rocket Internet, Millicom and MTN is unique and will enable AIH to reach more consumers with better services. We feel very strong about AIH’s existing and future ventures in Africa and look forward to working with our new partner.”

The investment in AIH is in line with MTN’s strategy of bringing the digital world to customers, adapting to their rapidly changing needs and delivering a consistent end-to-end user experience. The partnership brings together Rocket Internet’s expertise in developing successful global internet business models, and Millicom and MTN’s leadership position and unique knowledge of the local telecom markets.

The partnership is expected to create additional synergies for MTN in its core business. The investment is subject to regulatory approval, and the transaction is expected to close during the second quarter of 2014.

“MTN will continue to pursue digital business adjacencies as one of its key strategic priorities to drive growth and value to our customers across Africa”, added Dabengwa.

Our take: this partnership will see growth for MTN in that it is an innovative way to develop applications, platforms and products for making online purchases online (web and mobile), which can be easily integrated with its already existing product portfolio of Mobile Money, consumer and business solutions for easier business transactions for consumer products like food, transport, clothing, etc; Business-to-Business (B2B) transactions; mobile banking and the like, all on easy, safe and mobile platforms. We look forward to local launches, so we can bring you reviews.