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MTN to pour R2bn into Ghana infrastructure expansion

By , Senior news journalist
Ghana , 28 Apr 2021

Amid accelerated digitalisation, MTN Ghana has committed to spend $149 million (R2.1 billion) in total capex in the year, to meet the demand of digital services and help maintain the quality of its network.

MTN Ghana today released results for the quarter ended 31 March, saying it plans more investments in the network and has already rolled out 36 2G, 36 3G and 36 4G sites, and modernised 223 existing sites to 4G sites in the quarter.

This investment, it says, helped support 64% growth in data traffic and reached a total of 2 160 4G sites nationwide, resulting in an increase in its 4G population coverage from 71.7% to 76.1%.

In the quarter, MTN says, continued demand for data and increased adoption of more digital payment services supported growth in active data subscribers of 0.4 million, to reach 11.2 million, and growth in Mobile Money (MoMo) users of 0.1 million, to reach 10.7 million.

MTN Ghana’s data revenue grew by 40.4% year-on year (YOY), driven by a 4.4% increase in active data subscribers, a higher number of smartphones on the network (+5.9%) and a 64% increase in data traffic.

Data revenue contribution to service revenue increased from 26.5% to 30.4% YOY, says MTN, while MoMo revenue grew at 48.4% YOY. This, according to the telco, was driven by 1.2% growth in active users, higher person-to-person transactional activity and growth in advanced services, such as retail merchant payments, insurance and international remittances.

The contribution of MoMo to service revenue increased from 19.4% to 23.5% YOY.

In the period, voice revenue also grew by 3.3% YOY, supported by 2.4% growth in its subscriber base and the execution of various customer value management initiatives.

The telco says the voice performance was negatively impacted by the implementation of the 30% asymmetric interconnect rate reduction in October 2020. The contribution of voice to service revenue continued to decline from 45.6% to 38.5% YOY.

“We remain in line with our medium-term target to improve our margins and prudently manage our costs. EBITDA grew by 24.6%, with a corresponding margin expansion of 1.2 percentage points to 54.6%. The improvement in our margin was achieved through strong top-line growth and diligent execution of our expense efficiency initiatives, underpinned by continued digital distribution efficiencies,” notes MTN.

The mobile operator’s profit after tax increased by 31.6% YOY.

Turning to the regulatory matters in West African nation, the operator says it undertakes constructive engagements on issues related to policy and regulatory initiatives with regulatory stakeholders.

The Pan-African telecoms group was designated as a significant market power (SMP) in Ghana last year and the operator sought a judicial review on procedural grounds, arguing the decision did not meet the requirements of procedural fairness.

An SMP company has the ability to heavily influence the price charged for its product because no other companies have the same product or a similar product of the same quality.

MTN is the leading telco in Ghana, with a 55.21% market share.

“We remain focused on engaging the regulator and other key stakeholders on the regulator’s declaration of MTN Ghana as an SMP. It is our firm belief that the outcome of these engagements will help develop the industry to the benefit of all stakeholders.”

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