Mtn Revenue Rises By 11%, Subscribers Now 257.3m
MTN Group said strong growth in Nigeria and Ghana on Thursday helped offset the lower sales in its South African home market.
In the first quarter ( Q1) this year, the telco said it delivered strong results, raising service revenue by 11.1 per cent and growing service revenue by 16.5 per cent to ZAR 38.7 billion.
Earnings before interest , taxes, depreciation and amortization ( EBITDA) increased by 15.6%, while the EBITDA margin improved by 2.1 percentage points to 43.2%, in line with the medium-term margin.
MTN said the COVID-19 situation is an evolving one and will undoubtedly affect the year ahead. The company has lowered its capex budget for the year on expected disruptions to the supply chain and challenges rolling out under lockdown rules.
The telco added 4.2 million new subscribers in the first quarter. Its total number of subscribers now stands at 68.5 million, the largest in the country. Revenue also witnessed impressive growth as it raked in $845.
The telco said it is witnessing a dip in voice traffic, especially in its mass market.
“Voice revenue has experienced an immediate impact from the current macro disruptions,” MTN wrote.
The slump started in late March as the coronavirus and the dip in oil prices began to affect the economy. Both developments have caused a slowdown in economic activity and a reduction in people’s earning capacity.
MTN data traffic spiked as subscribers “began to adopt digital channels for most of their activities” Data revenue is still a relatively small part of MTN’s revenue. In Q1 2019, it represented just 16.6per cent of the company’s earnings.
Voice traffic remains MTN’s biggest revenue base. In Q1 2019 it represented 75.9% of all its earnings.
MTN has the largest 4G coverage in the country. In 2018, the company had 5.76 million 4G subscribers, the highest in theCountry according to the NCC.
Meanwhile, smaller companies like NTEL and Smile had 538,308 and 237,066 4G subscriptions respectively in 2018.
The dilemma for MTN and other telcos is that they have to spend more on critical infrastructure to improve internet access or risk losing data subscribers.