Nigeria’s Telnet close to selling mobile money unit to Opera

Telnet Nigeria Limited, the Nigerian technology conglomerate, is near closing a deal to sell stakes in its mobile money business subsidiary, Paycom to the maker of popular Opera Mini browser, Opera Software.

Technology Times checks reveal that barring any last-minute change, Telnet and Opera will this month sign the dotted lines of an agreement by which the Nigerian technology company sells controlling stakes in its fully-owned Paycom to the browser maker.

Opera has been in exclusive negotiations with Telnet on the acquisition hoped to extend the footprint of its mobile payment platform, OPay (Opera Pay) into the Nigerian market as part of its African expansion strategy, people conversant with the situation told Technology Times on condition of anonymity.

Technology Times checks reveal that barring any last minute change, Telnet and Opera will this month sign the dotted lines of an agreement by which the Nigerian technology company sells controlling stakes in its fully-owned Paycom to the browser maker.

With the deal sealed, Nigeria will be the next African market for the rollout of the OPay payment platform developed by Opera to let users shop and pay for services and products through their mobile or web browser.

Technology Times learnt that talks between the two companies have shifted into higher gear after the operating licence of Paycom was renewed by the Central Bank of Nigeria, the banking industry regulator that also oversees the mobile money sector.

Nigeria has issued licences to 21 companies to deliver mobile money services in the country and they have been directed to achieve a minimum capital base of N2 billion by CBN.

The banking industry regulator has also issued regulatory guidelines that defines the operating terrain rules as part of plans by the CBN towards “promoting a sound financial system in Nigeria.”

According to the CBN rules, Nigeria has adopted two models of mobile money services under which industry players operate:

1. The Bank-led Model: “This is a model where a bank either alone or a consortium of banks, whether or not partnering with other approved organizations, seek to deliver banking services, leveraging on the mobile payments system. This model shall be applicable in a scenario where the bank operates on stand-alone basis or in collaboration with other bank(s) and any other approved organization. The Lead Initiator shall be a bank or a consortium of banks.”
2. The Non-Bank led Model: “This model allows a corporate organization that has been duly licensed by the CBN to deliver mobile money services to customers. The Lead Initiator shall be a corporate organization (other than a deposit money bank or a telecommunication company) specifically licensed by the CBN to provide mobile money services in Nigeria.” 

   

Meanwhile, the impending deal between Telnet and Opera is coming as the two entities are seen to be joining forces to advance Opera’s plans to extend its OPay platform into the Nigerian market by acquiring controlling stakes in Paycom.

PayCom Nigeria Limited, a subsidiary of Telnet, which was granted licence by the CBN in August 2011 to operate in the mobile payment sector recently had its licence renewed by the banking sector regulator, a development that was to complement progress towards a deal, according to a Technology Times source.

The indications of the closed deal comes one year after Opera, the developer of the most popular mobile browser in Africa, announced its plan to invest N3 billion ($100 million) across Africa over two years.

Opera last year unveiled an ambitious plan to deepen its stakes in the emerging African internet ecosystem where the technology company “is planning to seek local partners to integrate value-added services, mobile payment and data bundling into its browser product.”

Opera said at the time that the alliance with local partners “will grant consumers access to quality content and services, giving them the ability to transact more easily on their mobile devices. The range of services to be added over the next 12 months will create a content and services hub that will provide African users with a truly unique experience.”

As part of the N30 billion African investments plan, Opera said that it plans expanding with new offices across select cities including Lagos, Nigeria’s commercial capital, and also hire 100 people for these offices over the next three years.  

Nigeria’s Telnet is a technology industry pioneer and leading player that is reputable as a factory for successful spin-offs that counts the likes of companies like Interswitch, the e-payment market leader; IPNX, a frontline ISP in the country, iTeco, a leading network business, alongside Paycom, among others.