In a landmark move for Nigeria’s telecommunications and financial services sectors, MTN Nigeria shareholders, yesterday, approved the strategic divestment of a majority stake in its fintech subsidiaries, MoMo Payment Service Bank (PSB) and Yellow Digital Financial Services (YDFS).

Meeting on April 30, 2026, investors passed Resolution 9, authorising a ‘Structural Separation Transaction’. This effectively shifts the burden of heavy capital investment to the parent company, MTN Group, while allowing the local entity to refocus on its core network operations.

Key deal highlights include MTN Group injecting approximately N152.06 billion into the fintech arms, with MTN Group taking a 60 per cent controlling stake, while MTN Nigeria’s holding dilutes to 40 per cent.

Full transaction completion is slated for December 31, 2026, pending final regulatory approvals.

​Management successfully argued that the fintech arms, while promising, are loss-making and require “incredibly steep” investment to scale digital payments and agent networks.

By offloading the majority stake, MTN Nigeria achieves two critical goals: capital reallocation, enabling funds to be diverted towards maintaining telecom market leadership and improving shareholder returns.
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Second, there is regulatory clarity. Here, MTN Nigeria will now operate exclusively under the Nigerian Communications Commission (NCC), removing the complexity of dual oversight with financial regulators.
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To ensure total market transparency, the vote adhered strictly to Rule 20.8 of the Nigerian Exchange Limited. Because the deal involves the parent company, all interested directors and associates were barred from voting, leaving the final decision to independent retail and institutional investors.
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”This separation protects our network leadership and ensures we can deploy capital where it delivers the most immediate value,” the board noted, following the overwhelming “Yes” vote from shareholders.

EARLIER, MTN reported a massive 92.8 per cent surge in capital expenditure for the first quarter of 2026, signalling an aggressive push to dominate the country’s 5G and data markets.

However, the telecommunications giant accompanied its robust growth figures with a sobering warning: rising energy costs could wipe up to two per cent off its full-year margins.

In its Q1 2026 unaudited results released yesterday, MTN revealed that capex (excluding leases) skyrocketed to N390.3 billion, higher than the previous year. These infrastructure expenses are intended to support a data segment that has become the company’s primary growth engine.

Analysis of the report showed that active data users grew by 9.5 per cent to 55 million, while data traffic surged by nearly 23 per cent. Total mobile subscribers reached 89.5 million, as the company added 2.3 million revenue-generating customers in just three months.

The firm’s service revenue climbed 41.8 per cent to N1.5 trillion, while Profit After Tax (PAT) jumped 165.9 per cent to N355.5 billion, marking a definitive recovery from previous currency shocks.

Despite the record profits, Chief Executive Officer (CEO), Karl Toriola, highlighted a significant operational threat: the volatility of energy prices. With the national grid remaining inconsistent, MTN claimed to be heavily reliant on diesel to power its sprawling network of base stations.

It warned that if diesel prices average N2,000 per litre in the second half of 2026, the company faces an estimated 1.8 to 2.0 percentage point hit to full-year EBITDA margins, and a potential profit impact of N120 billion to N140 billion.

“While we have successfully eliminated most of our foreign exchange exposure by repaying $105 million in dollar-denominated loans, we now face a structural constraint in the rising cost of power,” the company stated.

To counter the supposed diesel tax on its operations, MTN is expected to accelerate its transition to green energy. The company has already indicated that while capex intensity was high in Q1 (26 per cent), it expects this to moderate in the second half of the year as it balances network expansion with the need to protect margins against inflationary energy pressures.