Prime
Data, Fintech shore up MTN’s profitability
Ms Sylvia Mulinge
What you need to know:
- Contribution of voice to MTN's revenues has been declining but the void has been filled by rising data and Fintech revenue
MTN has said voice contribution to service revenue decreased to 43 percent in the half year to June.
The drop, which has been a key highlight for MTN and the industry as whole in the last five years, was a 3.5 percent drop from 45.5 percent revenue contribution in the same period in 2022.
However, even with the decline, voice remains the largest contributor to MTN’s service revenues, which for the six months to June grew by 15 percent to Shs1.2 trillion from Shs1.08 trillion in the same period last year.
Data contributed 22.9 percent to the overall service revenue. The telecom industry has been experiencing a decline in voice revenues due to increased usage of alternatives, many of which are internet and data driven.
However, the drop has been cushioned by growth in data and Fintech revenue, which, for instance in the case of MTN during the six months, shored up the telecom’s profitability, with profit after tax rising by 17.8 percent to Shs228b.
During the period, revenues from data increased by 22.1 percent, growing to Shs290.2b from Shs237.6b in 2022 while earnings from Fintechs grew by 18.6 percent to Shs358.3b from Shs302.1b.
Ms Sylvia Mulinge, the MTN chief executive officer, said data and Fintech had remained robust with double-digit growth while voice revenue increased by 9.4 percent underpinned by growth in customer numbers, adding 910,000 customers to rise to 18.1 million.
MTN has also indicated that active data subscribers grew by 21.4 percent to 6.9 million due to increased focus on driving up smartphone adoption and rising demand for data services, increasing the telecom’s data traffic by 53.4 percent. Active Fintech subscribers rose by 11.6 percent to 10.9 million.
Ms Mulinge also indicated that MTN has continued to invest in acquisition of spectrum and acceleration of 4G connectivity, noting that Uganda Communications Commission had during the period granted the telecom more spectrum and e-band, which will go a long way in enhancing its network performance and operationalisation of 5G to augment growth ambitions.
The telecom said it had added 361 4G sites on its network, boosting 4G reach to 83.4 percent from 67.7 percent, while 3G and 2G coverage grew to 92.4 percent and 98.4 percent, respectively.
MTN also reported a 50.4 percent increase in revenues generated from home-based broadband, one of the newest innovations.
