MTN Nigeria’s revenue from voice services grew by 8.0%, supported by an 8.7% increase in traffic and its customer value management initiatives.
The company disclosed this in its unaudited results for the quarter ended 31 March 2021.
MTN rued the industry-wide suspension of new SIM registration in mid-December 2020, especially the impact on voice revenue.
However, this was partly offset by increased usage by active SIMs in its base and migration to a higher quality of experience.
On Data revenue, MTN said this maintained the positive momentum from Q4 2020, rising by 42.6% YoY.
MTN Nigeria’s 4G coverage:
“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” MTN Nigeria CEO, Karl Toriola said.
Continuing, the report identifies that in line with MTN’s 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 penetration to 47.5% of our base, up from 45.9% in 2020.
MoMo Agents spread:
MTN Nigeria’s fintech revenue rose by 28.5%, driven by increased adoption of Xtratime and the 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”, Toriola said.
MTN Enterprise Business:
“Our digital business continued to gain traction with the uptake of our products and services and the structural turnaround in the business. As a result, digital revenue rose by 101.0%, supported by our rich media and value-added services, while our active user base was largely flat at 2.8 million.
“The enterprise business continued its recovery from the impacts of the COVID-19 lockdown as economic activity improved. However, service revenue for enterprise was largely flat YoY, mainly due to the non-recognition of USSD revenue in Q1.
Normalised growth (excluding USSD revenue) was 2.6%. We continue to engage with the NCC, Central Bank of Nigeria (CBN) and deposit money banks (DMBs) to conclude the operational modalities for the new pricing framework that has been agreed upon for USSD services.
“The mechanism for and timing of the recovery of the industry-wide outstanding debts that exist for USSD services provided to the DMBs form part of this process.
“As at the end of Q1, N40.3 billion was due to MTN Nigeria. In the meantime, we continue to account for USSD revenue on a cash basis.
“Expenses rose by 14.8%, mainly driven by a 19.2% increase in operating expenses arising from an accelerated site rollout and the effects of Naira depreciation on lease rental costs. The overall increase in expenses was partly mitigated by the comparatively moderate growth of 7.8% in cost of sales following the suspension of new SIM sales and activations. As a result, EBITDA rose by 19.1%, supported by revenue growth, with the EBITDA margin expanding by 0.9pp to 53.1%.
“Capital expenditure in the quarter was N89.9 billion, up 19.3% mainly due to site rollouts, while free cash flow increased by 18.9% to N114.7 billion. Our core capex excluding right of use assets was up 27.8% to N31.6 billion.
“Depreciation and amortisation rose by 16.8% due to the impacts of Naira depreciation and a 2.5pp increase in value added tax in February 2020.
“We recorded a 10.5pp reduction in our overall cost of funding, despite higher borrowings, leading to a 10.6% decline in net finance costs. This was enabled by a 95% reduction in the reference benchmark rate to 0.6%.
“Overall, we recorded a PBT growth of 33.9%, while PAT rose by 42.5% due to the release of an overprovision in deferred tax in the prior year”.