For most of the last decade, African startups operated with one quiet assumption baked in: the telcos were sleeping. MTN, Airtel, and Safaricom were too slow, too bureaucratic, and too distracted by infrastructure battles to compete seriously with agile, VC-backed challengers. That assumption is now a liability.
Across the continent, Africa’s major telecommunications companies are executing deliberate, well-capitalised pivots into the same territory that startups spent a decade claiming. Payments. Lending. Insurance. Digital services. And this time, they are not experimenting — they are scaling.
The Infrastructure Advantage That Never Went Away
Startups won the narrative war against telcos. They did not win the infrastructure war.
MTN Group’s Mobile Money platform, MoMo, now operates in 16 African countries and processed over $100 billion in transactions in 2024. Safaricom’s M-Pesa — the benchmark every African fintech has been compared to for fifteen years — continues to generate the kind of recurring, sticky transaction revenue that most startups can only model in a pitch deck. Airtel Money has accelerated its licensing push across East and West Africa. The telcos never really left financial services. They simply let startups believe the territory was open.
What has changed is intent. As Africa’s fintech consolidation wave reshapes who controls payments infrastructure, the telcos are responding with a clarity of strategy they lacked in 2018. MTN has separated MoMo into a standalone fintech unit, pursuing its own funding and licences independently of the parent telecom. Safaricom’s investment in M-Pesa’s API layer has made the platform a serious competitor to open banking infrastructure startups. Airtel Africa signed a commercial partnership with SpaceX to deliver Starlink direct-to-cell connectivity to 174 million subscribers — turning a connectivity asset into a data and services advantage.
The subscriber base is the moat that startups cannot replicate through fundraising. MTN Nigeria alone has over 80 million subscribers. Any product MTN launches has a potential distribution channel that would cost a fintech years and hundreds of millions of dollars to build organically.
Where Startups Are Most Exposed
The telco threat is not uniform. It is most acute in specific sectors.
Mobile money and payments is the most obvious zone of compression. Wave’s success in Francophone West Africa — disrupting telco-dominated mobile money with lower fees and better UX — showed that telcos can be beaten on product. But Wave required $200 million at Series A to achieve that disruption. Most startups do not have that runway, and Wave itself is still navigating the path to sustainable unit economics at scale.
Lending is the next frontier. Telcos hold years of airtime purchase data, recharge patterns, and call records — behavioural signals that can inform credit scoring without requiring bank account linkages. Some of Africa’s most significant 2025 funding rounds went to fintechs building proprietary credit infrastructure. Telcos do not need to build that infrastructure from scratch — they can buy it, as MTN’s MoMo has begun doing with third-party data partnerships.
Insurance is underappreciated but critical. Telcos are now selling micro-insurance through airtime deductions in Uganda, Ghana, and Tanzania. The product is simple, the distribution cost is near-zero, and the customer has already agreed to a billing relationship. Insurtechs building the same product face a distribution problem that telcos solved before they launched.
The area where startups retain the clearest structural advantage is B2B SaaS and enterprise infrastructure. Telcos do not build payroll tools, inventory management platforms, or HR software. They are not culturally configured to do so. The startup opportunity in those layers is genuine — and less threatened by telco re-entry than consumer financial services.
A Partnership Question, Not Just a Competition Question
The most sophisticated African startups are not framing this as a war. They are asking how to become infrastructure for the telcos rather than a competitor to them.
LAfricaMobile’s model — sitting at the intersection of telecoms, marketing, and financial services — illustrates one version of this thesis. Rather than fighting for the consumer relationship, it sells services into the telco channel. If a telco is going to distribute financial products to 80 million subscribers, someone has to build the underlying product stack. That is a position a well-positioned startup can occupy.
The risk of this partnership model is dependency. A startup that builds its entire distribution strategy around a telco channel is, effectively, building on someone else’s platform. When the telco decides to build the same feature in-house — as they eventually will — the startup loses its channel overnight. History in both African and global tech markets is littered with this failure pattern.
What Founders Should Actually Do
The telco resurgence does not invalidate the African startup model. It changes the rules. Founders building in consumer financial services need to be honest about whether their distribution advantage is real or assumed. Customer acquisition costs in markets where MTN is a direct competitor are not the same as customer acquisition costs in markets where the telco is asleep.
The startups best positioned to survive are those with genuine switching costs: deep integrations in business workflows, proprietary data built over years of transactions, or communities so loyal that a telco alternative would not move them. All of those take time to build. Founders who have spent the last three years focused on growth metrics rather than defensibility are now in a more precarious position than their cap tables suggest.
Africa’s digital economy has always rewarded the patient builder over the fast mover. The telcos’ return to relevance is a reminder that incumbency is not dead on this continent. It was only resting.
