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MTN raises Nigeria profits despite quarterly loss of 1.3 million subscribers

DESPITE the loss of subscribers in the quarter, MTN has raised its Nigerian revenue for the quarter period under review by 22 percent. | Reuters

DESPITE the loss of subscribers in the quarter, MTN has raised its Nigerian revenue for the quarter period under review by 22 percent. | Reuters

Published May 3, 2022


MTN’s Nigerian network user numbers have fallen by 1.3 million during the quarter period to the end of March, dragged down by regulatory directives to disconnect subscribers not registered with National Identity Numbers (NINs), although this has not had a financial impact.

The South African-based, but Pan Africa focused telco, now has 70.2 million subscribers in the populous African country.

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The Nigerian market has been volatile for South African and global tech companies, including MultiChoice and Twitter, but MTN chief executive Ralph Mupita believes the company will be able to make its unit there workable.

Regulators in Nigeria have directed that operators bar subscribers, whose SIM cards are not registered with national identity numbers, from making outgoing calls.

By the end of April, about “60 million subscribers had submitted their NINs, representing about 85 percent of our subscriber base” in Nigeria.

This means that about 15 percent of the company’s subscribers in Nigeria have not been able to generate revenue for MTN through originating calls.

Outgoing voice revenue from the subscribers yet to be reactivated contributed about 7.8 percent of MTN Nigeria’s total service revenue.

Despite the loss of subscribers in the quarter, MTN raised its Nigerian revenue for the quarter period under review by 22 percent.

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“This was led by growth in data and supported by voice, fintech and digital services. Our ability to drive service revenue growth while managing expenses, resulted in an acceleration in Ebitda growth to 25.7 percent,” Karl Toriola, the chief executive for MTN Nigeria said.

This contributed to the growth of MTN’s Nigerian after-tax profit by 31.3 percent. Earnings per share from the Nigerian operation resultantly rose by 31.3 percent. Capital expenditure was 80 percent stronger at R6.1 billion.

Revenue growth for the quarter period to the end of March was underpinned by 3.4 million year on year increase in active data users that now number 35.9 million. Its fintech unit also raised subscriber numbers by 6.2 million to 10.7 million.

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In Nigeria, MTN has just been granted final approval for its mobile money service bank operation by the Central Bank of Nigeria (CBN).

“This will enable us to offer financial services in line with the CBN’s guidelines, and support the government in fulfilling its agenda of driving financial inclusion in Nigeria,” the company said.

MTN anticipates that “in the near term, margins will be impacted” by the regulatory directive to restrict services for SIM cards not linked to identity numbers.

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It also anticipates that “higher energy-related costs as well as the investment to launch and roll out payment service bank” will weigh down on the group’s financial position.

As a result, “Ebitda margins for the full year will be slightly below our medium-term target range of 53 percent to 55 percent, on current operating and economic assumptions” in the Nigerian market.

MTN’s share price on Friday closed 3.66 percent lower at R168.69.