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MTN Uganda reduces reliance on diesel generators

By , Africa editor
06 Mar 2024
Sylvia Mulinge, CEO, MTN Uganda.
Sylvia Mulinge, CEO, MTN Uganda.

Over the course of 2023, MTN Uganda upgraded 3,241 cell sites (92% of its total sites) to solar and lithium-ion battery storage as the primary power source, while also connecting 2,329 sites (67% of total sites) to grid, moving away from diesel generators, reducing reliance on backup diesel generators.

Sylvia Mulinge, CEO of MTN Uganda, revealed the news today, when reporting financial results for the financial year ending December 2023.

"We registered a 60.5% reduction in carbon emissions in line with our Net Zero goals," she said, explaining how MTN is expanding its sustainability initiatives and looking to prioritise its environmental, social, and governance goals.

The company's announcement of a reduction in carbon emissions comes just a few days after its parent, MTN Group, signed a Memorandum of Understanding with Ericsson at the Mobile World Congress to explore opportunities to develop and promote ICT solutions for the decarbonisation of the telco group’s value chain ecosystem.

MTN Group and its operating companies have pledged to reduce greenhouse gas emissions by 47% by 2030 and reach Net Zero by 2040, as well as achieve workforce gender equality by 2030, and increase rural broadband penetration to 95% by 2025.

Mulinge also said today that MTN has completed one of its primary targets for the year, which was to improve network efficiency through the acquisition of extra spectrum.

She explained: “We upgraded our existing infrastructure and expanded our network with an investment (excluding leases) of Ush353.5 billion, as we work towards the fulfilment of our coverage and quality of service obligations.

“This enabled us deploy an additional 350 sites focusing on 4G LTE, which increased coverage by 6.7 percentage points (pp) to 85.1%, while our 3G and 2G coverage increased to 92.6% and 98.6% respectively.”

In addition, she said the telco became the first network in Uganda to go live on 5G closing the year with 37 sites rolled out.

“MTN Uganda was recognised as the mobile operator with the fastest internet speed this year, according to user-initiated tests completed in Uganda by Ookla, a global leader in mobile and broadband network intelligence,” she said.

In terms of operational performance, voice revenue grew by 11.6% year-on-year supported by stronger growth in voice traffic and optimisation of MTN’s bundled offerings.

Mulinge said: “In Q4, we witnessed accelerated growth of 15.2% as a result of aggressive net acquisitions and adoption of our festive voice packages in the period.

“We expanded our subscriber base by 13.3% to 19.5 million customers, delivered through sustained initiatives such us scaling our coverage, revamping our regional distribution network strategy and individualising our customer packages with our enhanced customer value management propositions.”

However, despite the strong growth, she said: “Our voice contribution to overall service revenue reduced by 1.7pp to 42.5% (2022: 44.2%) in favour of faster-growing data and mobile money.”

In other metrics, in the year, data revenue grew by 21.6%, boosted by a 22.4% increase in active data subscribers. Fintech revenue increased by 17.6%, supported by growth of MTN basic revenue (deposit, withdraw and peer-to-peer transactions), however this was slightly slower than anticipated growth in MTN’s advanced revenue portfolio, as its lending offering experienced credit scoring challenges, which impacted the portfolio.

The company said EBITDA grew by 16.3% supported by stronger revenue performance and focused operational efficiency.

Profit after tax increased by 21.4% to Ush493.0 billion with a higher profit margin of 18.5% (FY 2022: 17.8%), while capital expenditure increased by 5.5% to Ush 353.5 billion as MTN invested in network capacity enhancements.

Mulinge said: “We note that the lower growth rate in expenditure was further supported by a favorable forex trajectory as a large allocation of our capex is foreign-denominated. Our capex intensity reduced to 13.2% (2022: 14.7%). Our free cash flows improved by 13.1% to Ush 703.8 billion.”

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