MTN weathers COVID third wave as revenue soars
Pan-African mobile operator MTN Group side-stepped the impact of the third wave of COVID-19 infections across its footprint, to record superb growth in the third quarter (Q3) ended September.
MTN Group president and CEO Ralph Mupita provided the telco’s quarterly update today, saying the company remains well-positioned to drive faster digitalisation and capture growth opportunities in its markets.
In Q3, MTN Group recorded a solid trading performance, tracking positively against its medium-term targets, with double-digit service revenue growth and the expansion of earnings before interest, tax, depreciation and amortisation (EBITDA) margins, says Mupita.
This, he notes, was delivered through solid commercial momentum and the ongoing execution of MTN’s Ambition 2025 strategy in challenging COVID-19 macro-economic and trading conditions.
“The group has weathered a third wave of COVID-19 infections across our footprint. While the economies in many of our markets have started to open up, we remain conscious of the ongoing impacts and challenges the pandemic presents.”
Addressing growth metrics in the quarter, Mupita says group service revenue was up by 19.1%, group data revenue rose by 34.5%, while group fintech revenue surged by 35%.
Group EBITDA was up by 24.1%, and the group EBITDA margin improved to 45% (from 42.9%).
In its home market, South Africa, service revenue increased by 7.7%, with an EBITDA margin of 41.6% (from 39.3%), and in its biggest and most lucrative market, Nigeria, service revenue hiked by 23.5%, with an EBITDA margin of 52.6% (from 51.1%).
However, in the period, MTN recorded muted subscriber growth, negatively impacted by new SIM registration regulations in Nigeria.
“In the quarter, we added 0.2 million subscribers to reach 271.9 million, adversely impacted by the decline in subscribers in MTN Nigeria, which resulted from the revised registration regulations in Nigeria.
“Excluding Nigeria, total subscribers were up by 1.6 million. As more of MTN’s enrolment centres in Nigeria are certified for SIM registration in line with the current regulations, we expect positive net additions to resume during Q4 2021,” comments Mupita.
“Focused on driving our industry-leading connectivity business, we sustained voice revenue growth of 6.9%. Data revenue grew by 34.5%. It was supported by robust growth in data usage, up 52.6%, and a 4.1 million addition to active data users in the quarter to reach 119 million, as demand for work-from-home services, digital entertainment as well as online education remained robust.”
Mupita says MTN SA continued to deliver a robust overall performance for the nine months to September.
He notes that all core business units – the consumer business unit (CBU) prepaid, CBU postpaid, enterprise business unit and wholesale – remained on positive growth trajectories.
“The results were achieved in a challenging macro-economic environment, with slow growth and increasing rates of unemployment impacting consumer spend. As movement of people and the economy has opened up, MTN SA has also experienced an increase in competition for consumer wallet share.”
In the quarter, MTN SA’s total subscribers increased by about 849 000 to 33.5 million, which the telco says was driven by strong connections in prepaid subscribers, which were up by around 552 000 to 26 million.
According to Mupita, the growth was further supported by an increase in 4G customers.
“The postpaid subscriber base (including internet of things connections) closed at 7.6 million, with about 300 000 subscribers added in the quarter, aided by strong churn management but with some impact from store closures arising from the civil unrest in July,” he says.
Its Nigerian operation, an anchor market for MTN Group, also punched above its weight, as data continued to drive revenue growth, supported by fintech and digital services.
Data revenue rose by 51.3% year-on-year, fintech revenue grew by 54.7% and digital revenue grew by 82.3% year-on-year, as the active user base grew and penetration of MTN digital products deepened.
MTN Nigeria’s enterprise business also delivered a solid performance, which Mupita says was underpinned by an increased user base and the uptake of enhanced services.
As a result, he adds: “Service revenue from the enterprise business was up by 7.9% year-on-year despite the impact of the non-recognition of the USSD revenue during the period. We are pleased with the progress of the implementation of the new pricing framework for USSD services, which will ensure customers continue to access this service uninterrupted.
“In line with our Ambition 2025 strategy, the business is transitioning from products to enterprise platforms while leveraging core mobile and fixed connectivity.”