MTN has continued with its burgeoning revenue trajectory despite the pandemic and regulatory pitfalls that are smiting its growth potential.
The South African telecom giant, on Saturday declared revenue of N790.3 billion, representing an increase of 24.1 per cent in its unedited half year results for the period that ended on June 30, 2021.
According to the report, the telco’s Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA), grew by 27.6 percent to reach N417.2 billion. The EBITDA margin improved by 1.4 percentage points to 52.7 percent and its Capital Expenditure (CAPEX) rose by 39.1 percent to hit N186.4 billion. Its dividend per share was up about 30%, to N4.55 kobo.
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However, the impact of the ongoing NIN registration was noticed in the teleco’s, loss of mobile subscribers and mobile internet users.
According to the report, mobile subscribers declined by 7.6 million to 68.9 million, due to regulatory restrictions on new SIM sales and activations. Active data users also declined by approximately 52,000 to 32.5 million.
MTN Nigeria CEO, Mr. Karl Toriola said although the regulatory restrictions impacted growth, the company used new and high quality service to offset the deficit.
“Service revenue grew by 24.1 per cent, Year-on-Year (YoY), driven by the sustained growth in data and also partly due to the lower base in comparative 2020 voice revenue that resulted from lockdowns during that period.
“Voice revenue grew by 13.1 per cent, benefitting from an 11.8 per cent increase in traffic and our customer value management (CVM) initiatives. The impact on voice revenue from the industry-wide suspension of new SIM registration was partly offset by higher usage in our active SIM base as well as migration to a higher quality of experience,” he explained, adding that data revenue continued the positive momentum from H2 2020, rising by 48.3 per cent.
He said this was driven by increased usage from the existing base, supported by the acceleration in our 4G rollout and enhanced network capacity following the acquisition and activation of additional 800MHz spectrum in Q1.
The results showed that data traffic rose by 83.0 per cent YoY, while smartphone penetration was up by 5.8pp to 49.3 per cent.
“Our 4G network now covers 65.1 per cent of the population, up from 60.1 per cent in December 2020,” he added.
According to him, Fintech revenue rose by 48.2 per cent driven by increased adoption of Xtratime and the core fintech services.
“We continue to expand our MoMo agent network and broaden our service offerings. Our registered MoMo agents increased by 121,000 in H1 2021 to more than 515,000,” he said.
Commenting further on the results, Toriola said: “In the first half of 2021, we made good progress strengthening the resilience of the business, managing the impact of the COVID-19 pandemic and enhancing support to our people, customers and other stakeholders.
“Our progress towards achieving greater business resilience is reflected in the upgrade by Global Credit Ratings (GCR) of our national scale long-term issuer rating to AAA and affirmation of our national scale short-term rating of A1+ with a stable outlook. This puts MTN Nigeria on the highest possible GCR scale for short-term and long-term ratings, providing a solid platform for growth.”
Toriola said MTN would use the opportunity of its 20th anniversary in Nigeria to expand in many areas, including CSR initiatives and widening its network coverage to more rural areas.
“As we celebrate this milestone, we are pleased to announce that our Board of Directors has approved our participation in the Road Infrastructure Tax Credit (RITC) Scheme. This is in response to the government’s drive towards public-private partnerships in the rehabilitation of critical road infrastructure in Nigeria. We intend to participate in the restoration and refurbishment of the Enugu-Onitsha Expressway. Conversations in this regard have already commenced, and further announcements will be made in due course.
“In line with our desire to plant deeper and more permanent roots in Nigeria, we have also initiated plans to commission a purpose-built, state of the art MTN Head Office, designed to act as a central hub for our network, a catalyst for creativity and innovation, and a showcase for the flexible working structures that are driving efficiency gains in this new normal working environment.
“Aligned with our wider commitment to environmental sustainability, it will meet the highest global environmental standards, demonstrating the role of green technology in our future,” he said.
Toriola promised that MTN would continue to invest in improved world class services and its network, accelerating the expansion of its 4G coverage and providing home broadband.
“As part of our rural connectivity programme, we plan to connect approximately 1,000 rural communities to our network this year with an additional 2,000 communities in 2022. We are delighted that these are translating into strong operational performance in line with the objectives of Ambition 2025. In the next three years, we will invest over N600 billion to expand broadband access across the country in support of the government’s broadband plan,” he said.