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    Innovation Village | Technology, Product Reviews, Business
    You are at:Home»Africa»MTN Recorded 11% Revenue Increase After Double-digit Growth in Nigeria and Ghana

    MTN Recorded 11% Revenue Increase After Double-digit Growth in Nigeria and Ghana

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    By Tapiwa Matthew Mutisi on May 15, 2020 Africa, Business, Financial report, News, Report, Technology in Africa, Telecoms

    Africa’s largest mobile network provider, MTN, said yesterday that it had recorded an 11.1% increase in service revenue after normalizing for changes in currency in 21 countries.

    MTN said the revenue came on the back of double-digit growth in Nigeria and Ghana. Chief executive Rob Shuter said that revenue at its home market of South Africa fell 6.2% on roaming issues.

    RELATED READING: ROB SHUTER BEGINS HIS WORK AS NEW GROUP CEO AND PRESIDENT OF MTN

    Last week, rival Vodacom said that group service revenue for the year ended in March had increased 5 percent. Vodacom said service revenue in South Africa grew 2.3 percent with data usage elasticity supporting recovery to growth in the second half.

    Shuter said the local operation was negatively impacted by the wholesale business as it continued to account for Cell C roaming revenue on a cash basis and the loss of revenue from the Telkom roaming agreement which came to an end in June 2019.

    “Wholesale revenue from South Africa had declined by 44percent year-on-year due to the roaming issues,” Shuter said.

    “For Cell C specifically, roaming revenue continued to be accounted for on a cash basis in line with IFRS 15 and MTN SA recognised approximately R292million in revenue during the quarter. On March 31, 2020, R450m in Cell C revenue remained unrecognised.” Shuter said MTN SA commenced phase two of the roaming agreement with Cell C this month.

    RELATED READING: MTN FINALLY GRANTED LONG TERM UGANDA OPERATING LICENSE

    MTN also announced a 21percent cut in its capital expenditure guidance for 2020 due to supply chain disruptions as a result of the Coronavirus (Covid-19) pandemic.

    The group updated the guidance to between R21billion and R22bn from R28.3bn that it previously predicted last year.

    Shuter said MTN data and digital traffic surged in April as people from worked homes during the Covid-19 lockdown.

    “Data traffic on our networks has, on aggregate, accelerated by more than 30 percent when comparing traffic levels at the end of April 2020 against February 2020, which is before Covid-19-related behaviour such as work-from-home began in earnest,” Shuter said.

    RELATED READING: REPRIEVE FOR MTN AS NIGERIA DROPS $2 BILLION TAX CLAIM

    Peter Takaendesa, head of equities at Mergence Investment Managers, said MTN put in huge amounts of capital into its network in South Africa over the past few years and they needed to capitalise on the investment to grow ahead of their competitors.

    Takaendesa said they estimated that MTN, Cell C and Vodacom have continued to lose market share to Telkom mobile in South Africa during the period.

    “MTN group is executing very well in the rest of Africa driving group service revenue growth over 10 percent despite weaker South African revenue,” Takaendesa said.

    “Unfortunately, the market remains overly concerned about the potential impact of Covid-19 on most of those African countries and implications thereof on MTN’s financial position over the mid term.”

    MTN shares declined 9.82% on the JSE yesterday to close at R44.82.

    Related

    Financial Report Ghana Mobile Network MTN Revenue
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    Tapiwa Matthew Mutisi
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    Tapiwa Matthew Mutisi has been covering blockchain technology, intelligent technologies, cryptocurrency, cybersecurity, telecommunications technology, sustainability, autonomous vehicles, and other topics for Innovation Village since 2017. In the years since, he has published over 4,000 articles — a mix of breaking news, reviews, helpful how-tos, industry analysis, and more. | Open DM on Twitter @TapiwaMutisi

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