US$91m licence fee bites into MTN Rwanda’s after-tax profits
Mobile operator MTN’s decision to pay off its US$91-million licence renewal fees under a ten-year amortisation agreement in Rwanda has had a 39.6% “negative” impact on its profits after tax for the quarter period to the end of March.
Following a renewal of its licence last year, the company will make the second instalment payment in July this year. Payment for the fees for the license, valid for a period of 10 years, follows renewal of the permit by the Rwandan government last year.
“Following the renewal of our operating license in 2021, we are well on track to complete the second instalment of the License Fee payment by July 2022,” said MTN Rwanda CEO Mitwa Ng’ambi on Friday.
According to the company, amortisation of the license has “resulted in a negative impact on profit after tax which closed at $3.9 million”. In the previous contrasting period, MTN Rwanda posted an after-tax profit of about US$6.6-million.
MTN has 6.5 million mobile subscribers in Rwanda, with data users accounting for 2.2 million of these and 3.8 million making up its mobile money user base in the East African country.
Data service revenue “maintained its positive momentum, rising by 13.8%” solidified by “increased subscribers and usage and supported by increased network capacity”.
Data traffic for the company rose by 33.3% on a year-on-year basis and data income now accounts for 17.1% of MTN Rwanda’s service revenue generation. The number of homes connected to the telco’s fixed wireless and fibre-to-the-home has now surpassed 4300, boosting its active data user acquisition for the quarter by 453 000.
Mobile money users were also 12% stronger, contributing to a 24.5% uplifting in overall service revenues to US$48.8-million.
Rwanda fully opened up its economy during the quarter to March after lifting off restrictions put in place to deal with the COVID-19 pandemic.
This helped to strengthen “positive month-on-month commercial and financial momentum which has translated into encouraging results” for MTN Rwanda, the company said.
Revenue growth was “supported by growth in our voice, data, and mobile financial services” while its customer market share increased by 2.4 percentage points to 64.6%.