Vodacom Group plans to roll out financial services products in its new market of Egypt, using the super app the wireless carrier is developing alongside China’s Alibaba Group.

The JSE-listed company has received approvals to buy the Egypt business from its parent, Vodafone Group, for US$2.7-billion (R46.7-billion), CEO Shameel Joosub said in an interview. Vodacom is also negotiating the terms of a mobile money licence in Ethiopia, where it will likely use the M-Pesa platform of Kenyan partner Safaricom, he said.

“We see double-digit growth in financial services for the foreseeable future,” Joosub said after Vodacom reported first-half earnings that missed analyst estimates. “In Egypt, we want to start the full Alipay platform soon, and we expect to start our mobile money services in Ethiopia by early next year.”

Africa-focused telecommunications operators have invested heavily in fintech products to boost revenue on a continent that lacks physical banking infrastructure. Vodacom’s Johannesburg-based rival, MTN Group, is working on a deal to bring strategic partners into its financial services unit. Vodacom may consider a fintech carve out, Joosub said, though no decision has been taken.

Vodacom and Alibaba’s super app, called VodaPay, enables subscribers to access a broad range of services including taking out loans, shopping online and making standard mobile payments, similar to Tencent Holdings’ WeChat.

Vodacom shares fell as much as 6.5% on Monday, the most since March 2020, after the earnings miss and a decision to cut the interim dividend. Vodacom is more than 60% owned by the UK’s Vodafone.  — Bloomberg