MTN Nigeria rides on data, voice revenue to post 42% profit growth in Q1

Supported by 42.6 percent growth in data and 8.0 percent in voice revenue, MTN, Nigeria’s largest mobile telecoms operator reported profit growth of 42.44 percent in the first quarter of 2021.

According to the company’s financial report for the quarter ended March 31 2021, MTN Nigeria grew its profit after tax to N73.7 billion from N51.74 billion reported in eth comparable quarter of 2020.

The telco giant reported great performance despite the impact of the COVID-19 pandemic and a decline in 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.

Analysis of the first quarter financials of MTN Nigeria shows that its mobile subscribers declined by 5 million to 71.5 million due to the effects of customer churn and the regulatory restrictions on new SIM sales and activations. Active data users also declined marginally by 71,000 to 32.5 million.

However, the telco giant recorded an 86.7 percent increase in data traffic and a 48.5 percent increase in usage (MB per user) from the existing base. The improvement in data services, according to the company was supported by the completion of its acquisition and activation of an additional 800MHZ spectrum, enabling it to further increase traffic by 10 percent and enhance throughput by 79percent.

Digital revenue grew by 101.0 percent and Fintech revenue by 28.5percent as customers continued to adopt more digital products and services, a trend accelerated by the pandemic.

As at the end of March 2021, MTN said it had 449,100 registered Momo agents and 4.6 million Fintech customers. Its ability to drive service revenue growth while managing the growth in expenses resulted in an acceleration in EBITDA growth to 19.1 percent and EBITDA margin expansion of 0.9pp to 53.1 percent YOY.

“This enabled profit before tax ( PBT) and profit after tax (PAT) growth of 33.9% and 42.5% respectively,” the company said. MTN Nigeria grew its service revenue by 17.2 percent to N385.2 billion. Voice

Voice revenue grew by 8.0%, supported by an 8.7% increase in traffic and our customer value management initiatives. The impact on voice revenue of the industrywide suspension of new SIM registration in mid

December was partly offset by increased usage by active SIMS in our base and migration to a higher quality of experience.

Data

Data revenue maintained the positive momentum from Q4 2020, rising by 42.6% YOY. This was led by increased usage and traffic, supported by 4G penetration and increased network capacity following the acquisition and activation of an additional 800MHZ spectrum in March 2021. In line with our 4G acceleration, the 4G network now covers 61.8% of the population, up from 60.1% in December 2020. “We added approximately 1.2 million new smartphones to the network, bringing smartphone.”

Fintech

Fintech revenue rose by 28.5%, driven by increased adoption of Xtratime and our core fintech services. We continue to expand our Momo agent network and broaden our service offerings to include assisted withdrawal irrespective of the bank where the account is domiciled. Our registered Momo agents increased by 54,000 to 449,146. The volume of transactions processed was over 24 million in the quarter, up more than four times YOY, from an active base of 4.6 million subscribers.

MTN Nigeria CEO, Karl Toriola comments:

“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 wellbeing of our people, customers and stakeholders and to control the spread of the virus while ensuring network resilience and efficiency. As part of our Y’ello Hope initiatives, we continue to support Government’s efforts in combatting the COVID-19 pandemic. We supported the most vulnerable in our communities, providing them with free-to-access services (including SMS and data) as well as essential medical supplies (tests and personal protective equipment). We continue to support the Coalition Against COVID-19 (CACOVID) that has driven multiple initiatives, such as building isolation centres across the country. MTN Nigeria also paid taxes early in support of Government’s ongoing efforts. In addition, our REVV support programme for Micro, Small and Medium Enterprises (MSME) helps them navigate the new digital reality.