MTN Nigeria’s Diversification Into Digital And FinTech Fuelling Growth

MTN Nigeria, MTN Group’s biggest operating subsidiary, diversification from its voice telephony business into digital and FinTech space has been gaining traction and is a boon for its earnings.

Profit before tax increased by 8.9% to 76.3-billion naira (R3.6 billion) during the quarter, year on year.

Nigeria is MTN’s most profitable market and on Wednesday the operator said it would continue to gain market share, with the addition of 4.2 million subscribers to the network, representing a 6.5% increase in the quarter to 68.5 million.

The operator said in the three months ended 31 March 2020, active data subscribers rose by 6.6% to 26.8 million, representing an additional 1.7 million data users.

The company is expanding its 4G coverage to almost half of the population of the country enabling its customers to use mobile broadband to access digital and FinTech services.

“We saw strong growth in digital and fintech revenue with digital revenue growing by 63.7%, while FinTech was up by 36.1%,” MTN Nigeria said on Wednesday.

“Our mobile money (MoMo) agent network has grown to 178,000, adding 70,000 agents during the quarter.”

The company said digital business returned to growth, with revenue increasing 63.7% supported by a rich portfolio of digital products and services and improvement in customer journey experience.

“There was an improvement in the uptake of digital offerings and efforts to expand the active user base for the digital business continued to yield positive results.”

In the three months ended 31 March 2020, 1.6 million new users were added, bringing the active base for digital subscriptions to 3.8 million users.

MTN Nigeria added that FinTech revenue growth was 36.1% in Q1 2020 driven by an increase in the adoption of MTN Xtratime, an airtime lending service.

About 70,000 MoMo agents were added in the quarter, bringing the total number of registered agents to 178,000 nationwide. The total volume of transactions processed by agents during the quarter was over 5.6 million, about 80% of which were airtime vending. Transaction fees for all money transfers using the MoMo agent network were suspended for an initial period of one month starting 23 March 2020 as part of the Y’ello Hope Package.

The group said it was too soon to quantify the effect of the COVID-19 outbreak.

“The impact of COVID-19 on our first-quarter performance was not significant, except for delayed orders. However, given that lockdown measures only started towards the end of the quarter, and given the uncertainty associated with the likely duration and related economic impact of the COVID-19 pandemic and its effects on our customers, unstable oil prices as well as pressure on the rate and availability of foreign exchange, it is currently too early to reliably quantify the direct or indirect financial effects on our business going forward.”