MTN’s strategic push to diversify its business is paying off, with significant growth in fintech services and data traffic driving a notable increase in sales. By expanding beyond its traditional telecom offerings, the company is not only strengthening its market position but also tapping into new revenue streams that are proving to be highly lucrative.
In constant currency, data service revenue increased by 21% in the six months to 30 June 2024 and fintech service revenue climbed by 27%.
By the end of June 2024, MTN reported a modest 0.8% increase in its subscriber base, reaching 288 million across 18 markets. Among these, 150 million were active data users—a growth of over 9%—which drove a more than 33% surge in data traffic to 9,054 petabytes on MTN’s network.
The population covered by MTN’s 3G and 4G networks grew by 1 million and 4.8 million respectively.
“We recorded 185 million smartphones on our network, representing 64.5% penetration of our customer base (H1 2023: 59.8%) and reduced the average effective rate per megabyte of data by 40.0% year-on-year,” said MTN.
The number of active Mobile Money users also grew by more than 9%, reaching 66 million, and boosting MTN’s fintech transaction volumes by 18% to 9.7 billion during the period.
“Our payments and e-commerce ecosystem continued to expand strongly, supported by the growth in merchants and unique payer’s activity. The total value of MoMo merchant payments rose by 31.1% year-on-year to $9.0 billion,” said MTN.
“In BankTech, we facilitated a total loan disbursement value of $731.6 million (up 72.0%). This outcome was underpinned by robust growth in loan disbursements and unique users utilising the service; particularly in Ghana, Uganda and Rwanda. We are pleased with the evolution of our partner-led lending products in more established operations and the contribution from the newly introduced markets, which underpinned the performance.”
The company also reported that total value of remittances grew strongly by 42.4% year-on-year to $1.9 billion in the first quarter. “This was driven by growth in enhanced customer experience, operational optimisation to reinforce real time service availability and investment in digital marketing activities. We also activated services in new markets, including eSwatini, South Africa and South Sudan. The number of outbound corridors expanded to 174 and inbound to 577.
“Our InsurTech platform aYo’s performance, within our strategic alliance, was driven by our higher-average-revenue-per-policy focus, positive performance of the MTN SA device insurance book, and stronger focus on high-priority markets.”
To support this growing demand, MTN invested over R13 billion in capital expenditure to expand its 4G and 5G networks and enhance business IT systems.
The group’s balance sheet remained robust, with a holding company leverage ratio of 1.6x and an improved currency debt mix of 22% US dollar to 78% rand, well within its target range of 40:60.
“Although the underlying commercial momentum and strategy execution were solid in the period, macro headwinds impacted operating results,” said Ralph Mupita, MTN ‘s CEO.
“The further devaluation in the naira against the US dollar, the translation impact on reporting currency (rands) of the naira and the ongoing conflict in Sudan had the most significant impact on reported results.”
The group service revenue decreased by 20.8% (up 12.1%, in constant currency) to R85.3 billion versus R107.7 billion in the same period last year.
MTN’s voice revenue was 0.4% lower with voice traffic down by 8.9% year on year.
“Performance in MTN SA remained under pressure as customers are substituting voice usage with over-the-top (OTT) platforms. There was also a drag from MTN Ghana, as customers migrated to lower value packages. The performance of voice in other markets remained resilient, largely underpinned by pricing initiatives and base growth initiatives. Excluding MTN SA – the more mature voice market within our portfolio – and MTN Sudan, overall voice revenue increased by 2.6%.”
The group’s EBITDA (before once-off items) decreased by 41.2% (down 0.4%, in constant currency) to
R29.0 billion compared to R49.4 billion in the same period last year.
Impacted by the naira devaluation, the translation into the reporting currency and the conflict in Sudan, adjusted headline earnings per share (HEPS) decreased by 50% to 373 cents and adjusted return on equity (ROE) declined by 4.2 percentage points to 20.2%.
“MTN South Africa, which has now completed its network resilience investment, demonstrated encouraging progress from Q1 24 to Q2 24 in terms of topline growth and earnings,” he said, adding that the investment positioned it to provide an average network availability of more than 95% under stage 6 loadshedding. At the end of June 2024, network availability was 99%, supported by reduced loadshedding in the second quarter of 2024.
