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MTN surge in W Africa customers brings joy

CAPE TOWN – Africa’s biggest cellular provider MTN posted bumper group data revenue for the March quarter, coupled with growth in voice calls that was helped by a surge in its customer base in the west African countries of Nigeria and Ghana.

The mobile operator yesterday said that group data revenue grew 26.9% during the quarter to end March.

MTN chief executive Rob Shuter attributed the robust growth to the rollout of the company’s dual-data strategy that is aimed at boosting data coverage across its footprint of 22 countries.

“Digital service revenue is a material opportunity for the group, led by MTN Mobile Money (MoMo) and rich-media services. MoMo revenue increased by 52.4% year-on-year,” Shuter said.

The MTN group reported a 5.4% group voice revenue growth, buoyed by strong growth in Nigeria and Ghana of 15.2% and 20.6% respectively.

Group service revenue increased 9.1%. Group subscribers increased by 1.9% quarter-on-quarter with net additions of 4.1 million helped by Ghanaian subscriber growth in the quarter, with net additions of 484000 to reach a total of 16.2million subscribers.

Shuter said the group continued to focus on operational execution across its markets during the quarter, leveraging off the strong network investment of the past few years. However, MTN South Africa’s year-on-year service revenue was disappointing and only grew by 2.5% in March.

The service growth was supported by data and digital revenue, which increased 12.1% and 17.7% respectively, while outgoing voice revenue decreased by 9.2%, MTN said.

Despite the 2.5% service revenue growth, MTN South Africa’s earnings before interest, taxes, depreciation and amortisation (Ebitda) margin surged by 35% year-on-year, supported by continued cost efficiencies and the increase in service revenue.

Sibonginkosi Nyanga, an analyst at Johannesburg-based Momentum Securities, said the South African service revenue growth was below management’s full-year guidance of mid-single digits.

“The South African service revenue was expected to grow by a bigger margin than 2.5%. On a positive note, the group-wide Ebitda margin increase is a big plus. With the increase in South Africa and Nigeria Ebitda margins we should expect big earnings upgrades,” said Nyanga.

Shuter also said the company had made good progress on the initial public offering (IPO) processes in Ghana and Nigeria, which will be complete this year.

“To this end, we will be releasing full financial results for MTN Nigeria on May 7, 2018. On April 20, 2018, we received all required regulatory approvals to proceed with the IPO in Ghana, which we expect to launch in late May 2018,” Shuter said.

MTN shares rose 1.13% on the JSE yesterday to close at R127.47.


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