MTN Nigeria CEO Karl Toriola.

MTN Nigeria says despite a reduction in its overall subscriber base in Q1 and marginal decline in active data subscribers by 71,000 to 32.5-million, data traffic is up with a 48.5% increase in usage (MB per user) and the company is confident it is gaining momentum within the NIN/ SIM registration process, is dealing with the COVID-19 challenge and its operations in its largest market remains strong.

This is the message from the company as part of its presentation of its unaudited results for the quarter ended 31 March 2021.

The company also experienced a decline in mobile subscribers by 5 million to 71.5-milliion which its said is due to the effects of customer churn and the regulatory restrictions on new SIM sales and activations.

MTN Nigeria CEO, Karl Toriola said: “Operationally, service revenue in Q1 grew by 17.2% YoY, in line with our medium-term target, supported by growth of 42.6% and 8.0% in data and voice revenue respectively. This was achieved despite the impact of the pandemic and a decline in our subscriber base due to the effects of customer churn and the restrictions on new SIM sales and activations arising from changes in SIM registration regulations. We continue to collaborate with the Nigerian Communications Commission (NCC) and the Nigerian Identity Management Commission (NIMC) to update subscriber records with the National Identity Number (NIN).”

Toriola said says 35 million subscribers have submitted their National Identity Numbers (NINs) at 30 April 2021, representing 50% of the company’s subscriber base and 63% of service revenue.

He added: “We made good progress in the first quarter of 2021 despite the continued impact of the COVID-19 pandemic. We continue to prioritise the safeguards put in place to protect the health and well-being of our people, customers and stakeholders and to control the spread of the virus while ensuring network resilience and efficiency.”

Toriola expanded on the company’s progress regarding Fintech, digital and enterprise service delivery.

“Our digital business continued to gain traction with the uptake of our products and services and the structural turnaround in the business. As a result, digital revenue rose by 101.0%, supported by our rich media and value-added services, while our active user base was largely flat at 2.8 million. The enterprise business continued its recovery from the impacts of the COVID-19 lockdown as economic activity improved. However, service revenue for enterprise was largely flat YoY, mainly due to the non-recognition of USSD revenue in Q1. Normalised growth (excluding USSD revenue) was 2.6%. We continue to engage with the NCC, Central Bank of Nigeria (CBN) and deposit money banks (DMBs) to conclude the operational modalities for the new pricing framework that has been agreed upon for USSD services. The mechanism for and timing of the recovery of the industrywide outstanding debts that exist for USSD services provided to the DMBs form part of this process. As at the end of Q1, N40.3 billion was due to MTN Nigeria.”

“In the meantime, we continue to account for USSD revenue on a cash basis. Expenses rose by 14.8%, mainly driven by a 19.2% increase in operating expenses arising from an accelerated site rollout and the effects of Naira depreciation on lease rental costs. The overall increase in expenses was partly mitigated by the comparatively moderate growth of 7.8% in cost of sales following the suspension of new SIM sales and activations. As a result, EBITDA rose by 19.1%, supported by revenue growth, with the EBITDA margin expanding by 0.9pp to 53.1%.”

In April this year, in response to disruption to its banking service channels, MTN Nigeria announced it had activated a number of new channel partnerships with Fintech partners and “these will remain in place, significantly expanding the channels available to our customers and increasing our sales and distribution network.”

The new channel partners include Sparkle, Konga Pay, Barter By Flutter Wave, Jumia Pay, OPay, Kuda, Carbon, BillsnPay, MTN On Demand, MTN Xtratime airtime loans (*606#), myMTN.

The operator said: “The impact of the disruption was minimal on our operations as we were able to successfully activate alternative channels to enable our customers to purchase airtime and stay connected.”