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Millicom records solid Q2, despite 'tough' Tanzania

By , Portals editor
Africa , 22 Jul 2016

Millicom records solid Q2, despite 'tough' Tanzania

Despite lower than expected revenue, exacerbated by a decline in legacy voice/SMS business, and difficulty in certain environments like Tanzania, multinational telco and media firm Millicom has experience 9.2% organic revenue growth in Africa during Q2 this year.

According to Q2 2016 results, as per its Africa operations, Millicom reported a 9.8% increase in service revenue, as well as 8.7% organic growth in EBITDA in Q1, and 23.8% year-on-year to $62 million, a margin of 28.1%.

The company said all operations on the continent "reported good growth" although it acknowledged it had experienced a more difficult environment in its biggest market, Tanzania.

In February CEO Mauricio Ramos spoke of "stringent capital disciplines" to increase the overall revenue of 15% generated by African markets.

Ramos said at the time, "In 2016, we intend to deliver a significantly improved cash profile from the Africa businesses. To that end we have rapidly restructured the regional leadership and country operations in order to accelerate growth in the core business and mitigate challenges in the macro economy."

This week, in a statement accompanying results, Ramos expanded on the company's focus going forward.

"For Millicom, the important long-term story is about how we are reconfiguring our business towards the growth segments of data and cable. An increasing proportion of revenue is now coming from these segments as SMS and voice revenue is replaced by mobile data revenue, which grew by a quarter with nearly a third of our base now using mobile data. In this context it was pleasing that more than 600,000 new data customers were added in this quarter. This reflects in the adoption of smartphone whose growth continues to be very strong, with the penetration rate of smartphone users increasing by more than ten points year-on-year to 40.2%,"

"Our Cable business, representing residential Home and Fixed B2B businesses, also very much represents the future for Millicom and already delivers over 27% of service revenue."

The CEO added that the company was strengthening its B2B business and during Q2 2016 Tigo Business reinforced data centre infrastructure in Chad and Senegal, which the company believes is a necessary response to the growth in internet traffic that continues to change the digital landscape across its markets.

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